How Blockchain Smart Contracts Are Reinventing the Insurance Industry

How Blockchain Smart Contracts Are Reinventing the Insurance Industry

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If 2020 has taught us anything, it's that the world is growing increasingly unpredictable. Be it from pandemics, market swings, wildfires, and more, we’ve gone through global shocks that we never dreamed would happen in our lifetime. The insurance industry needs to prepare itself for this increasingly volatile future with a reliable infrastructure that can quickly and objectively settle claims around even the most unforeseeable events. 

Recent advances in blockchain technology, combined with increased demand for insurance products across the world, has set the stage for the rise of parametric insurance, or insurance that automatically pays out when certain events occur. The rise of smart contract technology along with increased demand for insurance products in the developing world could make 2021 the year that parametric insurance model finally moves from pipe dream to production. 

The Advantage of Parametric Insurance

Today, the insurance claims payment process still largely relies on an adjuster’s subjective assessment of damages and loss. Everyday people can’t afford to challenge a large insurance company in court, so most customers are ultimately forced to trust their insurance providers to pay out fair claims. 

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