Blockchain implementations. (c2019)

Abstract

The "blockchain" technology, supported by the decentralized digital currency Bitcoin, the artificial intelligence, and IoT technologies - has created much interest in the academia, industry, and the technology community. This is due to the fact that it is considered a breakthrough technology that could bring remarkable benefits to many different sectors, including health care, manufacturing, logistics, energy and precisely the financial industries among others. According to Gartner, blockchain is at the topmost of very high expectations, where the interest in the technology and the enthusiasm to implement it is at a peak level. Nonetheless, the technology is still viewed as not mature, thus yielding certain concerns. Within this paradox, the risk to adopt blockchain within the wave of enthusiasm, without objectively assessing its real added value is very high. Insurance is one of the finance sectors that, among others, started to carefully probe the possibilities of blockchain. For this specific sector, however, the hype cycle shows that the technology is still in the early innovation adoption phases, implying that the spectrum of possible uses and applications has not been fully explored yet. Insurers, as is the case with other firms that are not essentially active in the financial sector only, are at present expected to make a decision: adopt blockchain or not, unfortunately with the assessment of whether the investment was right not to be known till within 3–5 years. Based on this, the study highlights the importance of implementing blockchain technology in this sector to gain optimal efficiency and effectiveness. Two blockchain technology models, the IBM proof-of-work model and the cryptocurrency model, are examined to highlight the benefits and the implications of implementing the technology in the insurance sector. The implementations of Blockchain technology in the insurance business using the IBM proof-of-work and Ethereum models are assessed and showcased through early adopters and major players in the industry. In addition, lessons learned are highlighted and experts’ insights collected through interviews and testimonials will be provided. Based on the findings, and using narrative analysis, a conceptual model for the adaptation and a strategy for the integration of the Blockchain technology into the business are proposed. The findings indicate that the Blockchain technology is resilient and secure tool in the insurance sector. The results also show that the use of smart contracts in the implementation of the blockchain technology in the insurance sector leads to increase in efficiency and decrease in the costs, fraud and processing time.