Industry insiders: Blockchain can solve the adverse selection problem in the insurance industry

  Wang He, executive vice president of PICC Property and Casualty Insurance, said at the " Insurance Blockchain Alliance Theme Salon " that the three technologies of the Internet, big data and blockchain will promote the continuous evolution of the financial industry and move towards the " self-finance " era. The rise of the Internet has greatly improved the efficiency of the financial and insurance industries and reduced the potential risks brought about by information asymmetry. In the future, the insurance industry will move from an institutionalized platform to a technological platform.

Wang He said that the development of big data technology has greatly digitized individuals and society. Once the three problems of data storage, processing and transmission are solved, a series of concepts in the insurance industry, such as information asymmetry, uncertainty, and risk prediction, will be rewritten. Insurance companies in the algorithm era will shift from predicting risks to foreseeing risks, and insurance pricing will gradually move from pre-pricing to post-pricing or mid-pricing.

Wang He believes that blockchain technology, with its characteristics of decentralization and timestamp accounting, effectively solves the adverse selection and moral hazard problems in the insurance industry while protecting information privacy, and brings hope to Internet financial innovation. The blockchain era brings another concept, that is, smart contracts. Smart contracts are not blockchain technology itself, but they coexist with blockchain, solving the problem of automatic execution based on rules and reducing moral risks. The future application of blockchain can involve all aspects of society, but the first application is in the insurance field, because blockchain and insurance have many genetic connections. First, blockchain can make our original Internet, from an information network to a value network. Secondly, blockchain can establish a trust system that integrates front and back, so that insurance in the future will return to mutual assistance and mutual insurance. Third, the characteristics of blockchain information transparency meet the right to know and the right to choose.

Wang He said that there are still many complex issues that need to be paid attention to in blockchain technology innovation. First, blockchain is still a developing technology, and both external factors and connotations are in the process of enrichment; second, although the structure of blockchain is very rich, it is not easy to implement it. Blockchain should be grafted with other technologies to take advantage of each other; third, relevant work should be promoted in a pragmatic manner.

Yi Hui, Secretary General of the China Mutual Insurance 50 Forum, said at the theme salon that the biggest benefit of blockchain technology for mutual insurance is that the flow of funds is relatively transparent and can guarantee the security of user information. Since the network mutual assistance on the public chain does not depend on whether a central server is online, it can be guaranteed that the server will not crash. If a common standard can be established and blockchain technology can be used uniformly, it will be possible to better use big data to predict the occurrence of risks, including pre-designing insurance.

Yi Hui said that in addition to reducing transaction costs and effectively preventing fraud and adverse selection, the insurance industry can also use blockchain technology to reshape industry credit and return insurance to protection.