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The Role of Blockchain for Introducing Resilience in Insurance Domain: A Systematic Review

Abstract:

The insured market requires accuracy and agility to meet the requirements of customers, insurers, and other service providers. Some catastrophic events are impossible to avoid, and their negative effects impede the economic recovery of people and companies. Theft, illnesses, accidents, pandemics, and natural disasters are events that affect the possibility of ruin. In this context, the acquisition of an insurance contract allows the risk to be transferred to an insurance company and reduces uninsured losses. This market needs to maintain an audit trail of transactions, preserving the transparency of the information exchange process and the responsibility for the behavior of its participants. However, this segment faces new limitations related to market policies and risk coverage. Not all people can purchase insurance because they do not have banking services, which impedes the creation of economic resilience in populations that suffer from extreme poverty. Technologies such as blockchain offer a solution to financial exclusion and provide global financial access to anyone, without any discrimination. Blockchain technology provides reliability, transparency, and immutability to transactions using cryptographic techniques and distributed consensus methods, without the need for third parties to testify to the veracity of the events. With this consideration, the paper assesses how technology can address challenges, and identifies the future direction in terms of adoption within the insurance value chain. Finally, conclusions are provided for taking advantage of the versatility of blockchain in this business area.