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"The current centralized database model used by insurance companies and other institutions is becoming obsolete. By adopting decentralized data standards for reporting, there is no longer a need for each organization to maintain its own data, and they no longer need to verify records with other databases.
According to Long, DLT is helping insurance companies and other financial institutions address issues related to securities settlement, and it can assist in identifying and resolving conflicts regarding the ownership of securities.
Regarding insurance liability, Long mentioned that DLT can facilitate the automatic execution of ""parametric insurance"" contracts. Once the DLT ledger shows that a certain parameter of the insurance contract has been met (e.g., a specific intensity hurricane landfall), DLT smart contracts will automatically authorize and execute the required compensation payments.
""Parametric insurance"" is a type of insurance that doesn't compensate for pure losses but provides compensation when a pre-agreed triggering event occurs. Triggering events typically refer to catastrophic natural events that could result in losses or a series of losses.
Long explained:
Once the data is in (the DLT database), it (smart contract) gets triggered and pays immediately.
As for data security, Long stated that DLT is generally more secure than current database technologies. Current databases have significant shortcomings when it comes to vulnerabilities and firewall issues. She added that because data is encrypted through DLT, even if someone maliciously enters the database, the data cannot be stolen or destroyed, and in the unfortunate event of data being compromised, each node on the ledger network still retains a correct data record.
Another feature of DLT is that it allows individuals to establish globally encrypted identities and provide immediate access to authorized individuals and organizations. Magda Ramada Sarasola, Senior Economist at Willis Towers Watson, mentioned that this capability of DLT helps drive the development of microinsurance in developing countries.
Extremely poor individuals often lack personal property such as home ownership, car ownership, and financial accounts. Shared ledgers can collect data from smartphones or other devices to help these individuals establish a stable and verifiable identity, enabling them to enter the job market and access the financial system.
Ramada Sarasola cited a Mexican life insurance company as an example, which implements policies such as automatically paying the insurance benefit to the beneficiaries in Mexico if the policyholder dies outside the country.
Ramada Sarasola added:
The hype about blockchain and DLT has not been helpful because people have tried to distort DLT and apply the technology to unintended areas.
Another member of the expert panel, Angus Champion de Crespigny, Blockchain Strategy Leader at EY, stated that DLT is mature enough to be used for optimizing existing operations such as customer acquisition, transaction management, and process reengineering. He also pointed out that there will be further developments in innovative applications in the future, providing value and services that were not previously envisioned before DLT development, which will inevitably involve a learning process.
Angus Champion de Crespigny concluded:
The most common concerns we hear now are similar to what we heard about the internet in the 1990s. That doesn't mean the internet is worthless, and similarly, it (DLT) is just not ready for certain functions yet. The real big bang is yet to come." |
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Post time 2-11-2023 12:16:12
