Page 55 - MC14326 all pages

The South African Insurance Industry Survey 2016 | 51

–– Innovation in the personalisation of risk-based premiums for the writing of these new policies. ONE OF THE ADVANTAGES OF
BEING DISORDERLY IS THAT
–– Publically available data will be used to trigger claim events. ONE IS CONSTANTLY MAKING
EXCITING DISCOVERIES
–– Increases in automation will enhance the client experience.
A.A. Milne
–– Privacy and compliance with privacy rules will prove to be challenging.

Premium collection on the blockchain
Premiums could be paid in crypto currencies such as bitcoin. Policyholders on the bitcoin
platform would agree to a smart contract which permits the automatic deduction of a certain
amount of bitcoins on a monthly basis in order to keep the insurance policy in an active status.
If there are insufficient funds, the smart contract automatically disables the policy and the policy
lapses.

Regulatory risk
Regulators and governments around the world have struggled to regulate the blockchain due to
the decentralisation of the technology. This decentralisation effectively means that if the regulator
identified a specific instance of the blockchain that they believe is non-compliant with laws and
regulations, it will be impossible to stop this due to the fact that every node in the network will
have an identical copy of the blockchain. Regulators are going to have to investigate new and
innovative ways to regulate the blockchain.

Globally, we are seeing insurance companies investigating the use of blockchain in achieving
their target operating models. The FinTech sector of the insurance market is seeing large
amounts of investments and acquisitions as part of this strategy.

The industry is weighing up the first mover benefits versus the risk of the unknown, and in
the next couple of years we are going to see a great deal of change within the industry with
blockchain becoming more of a recurring enabler.