Insurance and blockchain,
partners for the future
A technology that facilitates the transfer of value at the heart of our business.
9 September 2020
Article updated the 03/15/21
As insurers, blockchain technology is very appealing because transferring value is at the core of our business. We are constantly exchanging value streams with our partners, reinsurers and policyholders and blockchain enables us to do this quickly and easily, without the need for intermediaries. While you can still insure without using a blockchain, at Wakam we decided to explore this because it allows us to increase information reliability and guarantees authentic transactions.
A promising ultra-secure technology
To date, we have over 550,000 contracts in our blockchain. This grows by 10% each month, in line with our partner growth. This makes us one of the biggest case studies in the world! But what exactly is blockchain and how do we use it?
For us, blockchain is a great way to automate part of our business. We were one of the first in the industry to trial it, and in 2018 we started using a private blockchain for our management system, first with Chain.com and now Quorum. This lets us exchange confidential information with our partners and improves audit reliability. It is also a cost-effective solution for the number of transactions that we process.
“We opened our blockchain and created our first insurance policies using it, over two years ago. Today, there are 300,000 active contracts across various insurance products,” says Olivier Jaillon CEO at Wakam.
One of the biggest advantages of blockchain is increasing operational efficiency. It allows us to be more efficient, lower our transaction costs, and we can insure risks that we wouldn’t be able to without this type of automation. On average, over 2,000 transactions per week pass through our blockchain, with total transparency. And thanks to this technology, our partners and clients can check the reliability of this recorded data in real time.
“With our partners, we want to build a transparent and secure ecosystem around our blockchain. One that enables us to move towards new insurance options and new risks,”
states Olivier Jaillon, Chief Executive & Enablement Officer at Wakam
How does technology improve the insurance experience?
It is the insured’s need for proactivity that motivated us to explore blockchain. Traditionally, in the event of a claim, it is up to the client to provide proof of damage. By using blockchain, we wanted to reverse this model. As the insurer, it is us who determine the incident and automate the claims process.
To do this, we have to define events or “triggers”: public data (weather, plane delays, etc.), private data (via trusted third parties) and the Internet of Things (IoT) which is a system similar to blockchain, help us automate these claims. With blockchain, our entire claims management system – from contract creation to client compensation – can be automated via various triggers.
For example, we offer e-commerce insurance to cover retailers for unpaid payments on three-part, interest-free installments. We protect them against the risk of customers defaulting on the 2nd or 3rd installment by automatically compensating the retailer who could otherwise be faced with a payment default. In micro-insurance, blockchain helps to protect some of France’s less fortunate.
Moving towards a public blockchain & the need for transparency
By the end of 2020, we aim to use blockchain for all our automated contracts. Complete automation of complex claims is our mission for 2021!
We champion transparency, so we are working on opening up our blockchain from private to public. A public blockchain gives us the same robust security, as well as the possibility of exchanging value with more partners across the globe, and without IT constraints. For example, to exchange funds outside of Europe, the current banking system is slow and expensive. Using a public blockchain would allow us to speed up these processes and cut costs.
Today we are dependent on the ecosystem’s infancy. Until it develops, we are adding proof of the integrity of our private blockchain use into the public Bitcoin blockchain, every 6 hours. Our partners can check the accuracy of this information recorded in our private blockchain, thanks to its attachment to an unalterable public blockchain.
In the future we hope to open up our blockchain and create bridges with those of our partners – we are gradually making each of them aware of blockchain and its benefits. Blockchain allows us to look to the future and we can’t wait to share this technology with you, when building your next product.