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Saturday, May 15, 2021
Home News PWC and Z/Yen Roll Out Insurance Blockchain Report

PWC and Z/Yen Roll Out Insurance Blockchain Report

Advisory firm PwC has announced the release of its new report, titled ‘Chain Reaction: How Blockchain Technology might transform wholesale insurance‏‘. Within this report the rise of new technologies in the financial services sector, along with the potential impact of FinTech on market players and their attitudes to the latest technological developments, is assessed. In addition, it offers strategic responses tP the situation. The report, conducted by Z/Yen, used information gathered from over 50 interviews with global brokers, insurers, reinsurers, regulators and trade bodies and set out the potential use cases for Blockchain in wholesale insurance.

In the report, PwC stated:

‘We believe that lack of understanding of the technology and its potential for disruption poses significant risks to the existing profit pools and business models. Therefore, we recommend a pro-active approach to identify and respond to the various threats and opportunities that this transformative technology presents. A number of start-ups in the field, such as R3CEV, Digital Asset Holdings and Blockstream are actively working to create entirely new business models that would lead to accelerated ‘Creative Destruction’ in the industry. The ability to collaborate on both the strategic and business levels with a few key partners, in our view, could become a key competitive advantage in the coming years.’

In particular the report noted some areas that will be disrupted, including consumer banking, fund transfer and payments highlighted as the sectors most likely to be affected over the next five years. Additionally, a second area making inroads in the asset management and insurance sectors was detailed. Part of the reason that decentralised services were finding favour was suggested as being linked to customers becoming used to the digital experience offered by companies such as Google, Amazon, Facebook and Apple – they expect the same level of customer experience, such as accessibility, convenience and tailored products, from their financial services providers.

Another place ripe to exploit Blockchain technology was stated as the insurance sector, which the report explained:

“…sees usage-based risk models and new methods for capturing risk-related data as key trends, while the shift to more self-directed services remains a top priority in order to efficiently meet existing customer expectations.”

Whilst the huge benefits of Blockchain technology, particularly in regards to cost-saving and transparency through disintermediation, were acknowledged by participants in the report survey, it was noted that fewer companies are ready to embed Blockchain technology into their practices compared with other fntech. This was mainly due to a lack of familiarity with the subject and the report pointed out this may lead companies to undervalue the potential benefits they could reap, which was described as a once-in-a-generation opportunity to transform the industry to their benefit.

PwC recommends that companies should stop attempting to control all parts of their value chain and customer experience and move toward the centre of the FinTech ecosystem by leveraging their trusted relationships with customers and their extensive access to client data. Three areas of particular importance were described as placement process , KYC and AML, and claims management.

 

Richard Kasteleinhttps://www.the-blockchain.com
In his 20s, he sailed around the world on small yachts and wrote a series of travel articles called, 'The Hitchhiker's Guide to the Seas' travelling by hitching rides on yachts (1989) in major travel and yachting publications. He currently lives in Groningen, the Netherlands where he has set down his anchor to raise a family and write. Founder and publisher of industry publication Blockchain News (EST 2015) and director of education company Blockchain Partners (Oracle Partner) – Vancouver native Richard Kastelein is an award-winning publisher, innovation executive and entrepreneur. He has written over 2500 articles on Blockchain technology and startups at Blockchain News and has also published in Harvard Business Review, Venturebeat, Wired, The Guardian and a number of other publications. Kastelein has an Honorary Ph.D. and is Chair Professor of Blockchain at China's first blockchain University in Nanchang at the Jiangxi Ahead Institute software and Technology. He has over a half a decade experience judging and rewarding some 1000+ innovation projects as an EU expert for the European Commission's SME Instrument programme as a startup assessor and as a startup judge for the UK government's Innovate UK division. Kastelein has spoken (keynotes & panels) on Blockchain technology at over 50 events in 30+ cities.
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