Four steps to insurance efficiency and growth in 2019
Blockchain adoption in the insurance sector is poised for exponential growth in 2019, as awareness rises of the multi-billion-dollar savings this technology can bring. If 2018 was the year in which the industry became aware of the full scale of its expense and efficiency benefits, 2019 could be the year in which these solutions are integrated into mainstream thinking.
But for this to become a reality, the industry needs to take four key steps in 2019:
1. Engage C-suite to champion blockchain
2018 saw awareness of the benefits of blockchain extend beyond technology specialists to the C-suite. A top down approach can drive change, with C-suite champions serving as advocates that help engage industry peers to follow-suit. Executive support is critical to building the business networks that blockchain underpins, and it is through these networks that efficiencies can be achieved across the insurance value chain.
2. Establish strong governance
The networks enabled by blockchain technology require transparency and governance to optimise performance for all participants. A business network governor can define the strategic management and governance policies of the network, taking accountability for the implementation and enforcement of these policies, while participants must engage to help develop governance structures that can facilitate growth of the network. Travis Macmillian, chief business officer at Xceedance, ChainThat’s active strategic partner and investor, explains: “With transparency comes a new way of doing business between partners and this governance will drive a heightened level of partnership which will facilitate a more streamline trading relationship between the parties, in addition to the ability to do more for less so that everyone wins”.
3. Set a realistic implementation schedule
Integrating new and legacy IT systems can be a headache for insurance executives, and ChainThat has been addressing the integration challenge. As discussed in our last blog post, this technology can be speedy and relatively straightforward to implement if effectively planned and managed. ChainThat provide a phased and incremental approach to integration for adopters and a platform that helps accelerate the customer solution proposition to drive innovation, deliver ROI and time to market faster. “The tools that we have today should not be viewed in the same light as those which have caused headaches in the past,” Macmillian says. “With the right partner, the right technology and the right implementation schedule, a project can and will be delivered on time and on budget”.
4. Adapt to market conditions
Reducing the expense base is critical to an insurance market awash with capacity, and blockchain technology can help deliver the cost savings and efficiency gains critical to the future growth aspirations of insurers and brokers. “Market conditions are right for change in the insurance industry, especially in light of heightened regulatory pressure, increasingly complex reporting criteria and a need to reverse the trend of falling profits across insurance organisations,” Macmillian says. “Blockchain will facilitate answers to many of the challenges that insurers, reinsurers, managing general agents and underwriters and brokers are facing today. The need is clear, the solutions are available, and the market is ready for change”.