Insurance is a multi-trillion dollar industry; an industry that is ripe for disruption. With 81% of insurers anticipating blockchain’s mass adoption, we shall likely witness the majority of insurance companies integrating blockchain solutions into their business. Let’s take a look at the top blockchain insurance projects.
What is blockchain insurance?
First, let’s explain both concepts separately.
The insurance industry is pretty broad but it generally consists of companies that offer risk management contracts. At its most fundamental level, one party (the insurer) will guarantee payment in the unlikely event that a particular circumstance occurs (house burns down, medical emergency, etc). Meanwhile, the other party — the insured — pays the insurer a small price in exchange for that protection.
Blockchain, on the other hand, is a decentralized database that allows multiple people that do not trust each other to transact.
Blockchain and insurance are a great match. When combined, their applications range from health insurance, fraud detection, reinsurance, property and casualty insurance, and just about anything that people want to insure.
There are definitely more than five blockchain insurance companies, but to save your time, we’ll only focus on the most remarkable ones.
Etherisc is not a company but a platform that enables anyone to build any type of insurance product through a common infrastructure, insurance templates, and license-as-a-service (LaaS).
It is an Ethereum-based permissionless system that has an algorithm that can calculate risk.
This allows any type of risk to be priced and serviced by a group of independent insurance providers without the need of any centralized decision-makers.
Etherisc has a native currency called DIP token. These tokens allow users to access the insurance system.
DIP tokens are also used for staking. Staking DIP tokens translates to users offering a collateral to guarantee future performance and service quality.
Users are rewarded when they stake their DIP tokens in the form of transaction fees.
Etherisc can create insurance smart contracts for just about anything that has conceivable levels of risk.
It can create a type of insurance that self executes when certain conditions are met. E.g. an insurance that triggers near instant payouts to farmers in the event of a typhoon in their area.
Another application for Etherisc is data breach. As you might have known, twelve major crypto exchanges were hacked in 2019 alone.
That’s a staggering number! It is probably the reason why crypto adoption is slow. I’m kidding, but it surely is a contributing factor.
Etherisc can also enable anyone to create insurance products for token economies. For instance, if a smart contract malfunctions or if a crypto wallet is corrupted.
This is especially relevant for lightning payment channels, which are still unstable and prone to breaking.
B3i is a software company that is led by 18 insurance companies consisting of major industry players including AXA, Allianz, Swiss Re, Zurich.
They build DLT (Distributed Ledger Technology) software for their clients as well as provide them with a range of solutions.
By using a blockchain record for all insurance products and services, enterprises and individuals can rest assured that their records are immutable, self-executing, and secure.
Well, at least that’s what they say. All I know for sure is that they are backed by the big guns and have abundant resources. That’s the main reason why I placed them in the number 2 spot.
I’m honestly not sure of these guys. They smell of banks and corruption. Maybe I’m just judgmental. I don’t know.
According to them, a DLT-enabled network increases the visibility of risk since many people are sharing the data and watching it in real time.
Several companies are currently testing out their software to assess and provide feedback. So we don’t know how good their product is yet.
Medishares is another insurance blockchain built on top of Ethereum. It is a decentralized insurance marketplace. Unlike other blockchain insurance projects, it focuses mainly on health.
The platform connects insurance providers with users seeking their services.
Basically, every month you pay a specific amount in a money pool group of your own choosing. And if someone becomes ill or requires medical attention, the funds from the group will be used to pay the medical bill.
Medishares has a native currency called MDS tokens.
Anyone who becomes an insurer is entitled to receive MDS from the marketplace. MDS is tradable in Huobi Global and Huobi Korea exchanges.
- The platform removes geographical borders and allows anyone to participate in the global insurance market.
- The smart contract and decentralized architecture will substantially lower the cost of operation.
- All tokens are locked in smart contract, and therefore, no one is in charge of the capital, which removes any single point of failure that is prevalent in centralized organizations.
R3 is an enterprise blockchain software company developing a broad range of applications spanning multiple industries.
They have two main products:
- Corda — an open source blockchain platform
- Corda Enterprise — the enterprise version of the Corda blockchain
Now, R3 is not merely a blockchain insurance ecosystem, like I said, they span multiple industries. But, they do have amazing insurance-specific applications which help insurance providers automate and streamline their operations.
They have over 15 different insurance apps. I don’t have time to talk about all of them but I’ll share the major ones.
- Adappt — a system that streamlines underwriting processes by connecting internal and external stakeholders together to speed up sales, remove inaccuracies, and improve overall customer experience
- Blocksure OS — an insurance distributed ledger platform that enables all parties to maintain a traceable record of their transactions
- Midas — insurance that is designed for motor companies; provides instant authentication of motor insurance policies and cover notes
According to its founder, Teambrella is not an insurance company, but rather, it is what insurance is supposed to be.
Their premise is that insurance companies are not interested in paying out their clients and that the more customers they help the less their profits will be.
Assuming this were true then insurance companies will do everything they can to find a way legally or illegally to not pay you what they owe.
The team behind Teambrella aims to remove this conflict of interest and make insurance transparent and fair.
Teambrella is basically a peer-to-peer insurance network that enables users to provide insurance for whatever they want without the need for third parties.
In Teambrella, users form teams which allow them to offer coverage for each other. And if one individual needs reimbursement, the rest of the team chips in to provide it.
TMB is the utility token for the platform. It is based on Ethereum and runs on the Ethereum blockchain.
Teambrella brings a new level of fairness and transparency to insurance. You and your team basically control every condition of the coverage.
The idea is that your team should be incentivized to treat you fairly when you need reimbursement. Otherwise, they can’t expect the same treatment from you once they are the ones that need coverage.
Furthermore, there are no insurance premiums or extra fees since there are no middlemen.
Blockchain and Insurance
All things considered, blockchain and insurance make a great pair. I consider insurance as one of the few valid applications of blockchain and will likely help drive crypto adoption in the next few years.
Most insurance companies agree that blockchain is the future. Therefore, it is bound to happen at some point.
Now it needs to be said that the crypto aspect must not be removed. A blockchain has a very limited use case without the crypto side of things. As long as they do that, blockchain insurance will likely be a successful addition to this broad industry.
Join our newsletter as we build a community of metaverse and web3 pioneers.
The next 3-5 years is when new industry titans will emerge, and we want you to be one of them.
- Receive updates on the most significant trends
- Receive crucial insights that will help you stay ahead in web3
- Access whitelist spots of the most hyped NFT drops
- The chance to be part of our OG community, which will have exclusive membership perks