PwC report: Blockchain can help the development of wholesale insurance industry (download the full report)

Consulting giant PwC has released a new report titled "Chain Reaction Chain Reaction:How Blockchain How Blockchain Technology Technology might transform wholesale insurance transform wholesale insurance". The report assesses the impact of blockchain technology on market participants in the financial services sector and fintech, analyzes their views on the development of blockchain technology, and ultimately proposes strategic countermeasures for its development. The report, jointly released by PwC and Z/Yen Think Tank, contains information from more than 50 interviews with cross-border brokers, insurers, reinsurers, regulators and trade groups, and details the potential use cases of blockchain in the wholesale insurance industry.

The report states:

We believe that the lack of understanding of blockchain technology and its disruptive potential has led to the perception that it poses a significant threat to existing profit chains and business models. Therefore, we have taken a proactive approach to gain a deeper understanding of the technology, analyze the "threats" one by one, and present the opportunities it brings. The blockchain field has spawned a series of startups, including R3CEV, Digital Asset Holdings, and Blockstream, who have created new business models and brought disruptive changes to the industry. We believe that tapping into key partners from a strategic and commercial perspective will bring us a significant competitive advantage for future development.

The report highlights some areas that will be affected by blockchain technology, including personal banking, fund transfers and payments. Payments are seen as the most affected area in the next five years. Asset management and insurance will also be affected because decentralized services are in high demand. Companies like Google, Amazon, Facebook and Apple are committed to providing customers with digital experiences, and they also expect the same level of customer experience, such as accessibility, convenience and customized products.

…Blockchain can create new risk models and risk estimation data. In order to adapt to the different needs of each customer, developing personalized services will become a top priority.

Respondents all said that blockchain technology has great advantages in terms of cost savings and increased transparency (eliminating middlemen), but compared with financial technology companies, other companies rarely promote actual use cases of blockchain technology. The main factor causing this phenomenon is the lack of understanding of this technology. The report pointed out that in the long run, these companies will inevitably misjudge the potential value of blockchain technology. After all, the emergence of this technology is a once-in-a-lifetime opportunity to completely reform their industry and bring them unexpected value.

PwC recommends that companies should not try to control the entire value chain and customer experience. They should focus on the fintech ecosystem, build trust with customers, and try to obtain more customer data. The report points out that three points are very important: staffing management, KYC and AML, and claims management.

To learn more about blockchain and the insurance industry, please click on "Blockchain and Insurance Industry Special Topic".