Insurances have become an integral part of our lives. We use insurances to hedge ourselves against accidents, thefts, frauds, loss of life or any other uncertain events. But the global insurance industry, despite its unmatched size pulling in $6.3 trillion as insurance premium in 2019, lacks in many ways.


It has become increasingly difficult for both insurance companies and insured individuals and businesses to go about the insurance procedure. Both parties have to go through the complex compliance process and yet between five to 10% of insurance claims are fake, forcing companies to unnecessarily pay the insurance amount. This makes it increasingly important for insurers to have better insight into their customers’ data.


Decentralised insurance can be a gamechanger for the insurance market. Blockchain and decentralisation may not be the end of “all things bad” for the insurance industry, but it can lay the foundation for the more efficient functioning of the industry. By making the system decentralised, it will curb security and transparency issues while also automating the parts of the insurance process. 


In 2018, the “blockchain in insurance” market was valued $64.5 million and it will expectedly grow to $1.39 billion by 2023 at an 84.9% compound annual growth rate.

Renowned decentralized insurance projects

  • Etherisc

Etherisc is one of the most widely known companies working in the decentralised insurance space. It has an open-source development platform that focuses on building decentralised insurance applications. It has six products that offer crops insurance, flight delay insurance, collateral protection of collateral-backed loans, hurricane protection, social insurance and insurance against crypto wallet theft or hack.

  • B3i

Having raised almost $22 million in funding, the Switzerland-headquartered blockchain insurance startup B3i was formed by 20 national and international insurance companies including Munich Re, Allianz, SBI Group and Swiss Re. Working to bring higher speed and lower cost to the insurance industry, the company launched its first product dubbed “Property Catastrophe Excess of Loss Reinsurance” in July last year.


Why move from centralised to decentralised insurance?

  • Automation

Through the use of smart contracts on a blockchain, decentralised insurance platforms can automate various processes from premium payments and insurance payouts, risk/loss assessment, insurance claim registration and verification, document signing, and so on. To be more precise, smart contracts replace middlemen from a majority of the insurance process and increase accuracy and efficiency.

  • Transparency & Security

Transparency and blockchain go hand-in-hand. With the use of blockchain technology and smart contracts, neither insurers nor customers will be able to defraud the other. A blockchain ledger will be able to produce a history of all records relating to a person’s insurance and prove their legitimacy. The records’ immutability will also ensure that no changes have been made to the records, thus, enforcing a high level of security. 

  • Accessibility

Lower costs due to automation will allow companies to provide insurances and lower costs. Low-income individuals and businesses will be able to afford insurances more easily. Furthermore, digital assets on the blockchain will lower the barrier for investors of the insurance market, thus attracting a wider audience.

The way forward

The advent of new technology has barely impacted the insurance market. It still functions similar to how it functioned decades ago. However, the use of blockchain, smart contracts and digital assets for insurance processes can bring a monumental change. With innovation already happening as we speak, we will soon see the benefits of blockchain disrupt a majority of the insurance industry worldwide.