Blockchain – the technology behind digital asset and payment system bitcoin – will become a major inurance technology within the ecosystem, according to Abizer Rangwala, MD of Accenture’s insurance IT strategy.
Rangwala says that while bitcoin has gained much attention, since its launch in 2009, it will be the underlying blockchain technology that will have the most impact on insurers.
Pointing out the ‘real’ advantages of the insurance technology, Rangwala said that blockchain offers high levels of security thanks to its distributed database which makes it difficult and ‘prohibitively expensive’ to edit. Transactions are also transparent, dealings also performed quickly and inexpensively, and the history of contracts or deals are recorded.
While blockchain technology already being used widely in retail and banking, the insurance sector is only beginning to look at its commercial applications, according to Rangwala.
“Insurance is gaining momentum in the use of blockchain and slowly figuring out the true business use or to some degree what the use case should be. I have no doubt that within the next few years it will be a major technology in the insurance ecosystem.”
He adds however: “The effect of blockchain for insurance products is a not as clear-cut and will likely take longer to emerge than for banking.”