Morning Briefing: Insurers unaware of risk from Blockchain

Morning Briefing: Insurers unaware of risk from Blockchain | Insurance Business Canada

Morning Briefing: Insurers unaware of risk from Blockchain
Insurers unaware of risk from Blockchain
The financial sector is concerned about the increasing threat posed by FinTech firms. Pressure on margins and loss of market share are the top concerns of respondents to a poll by PwC with 83 per cent of all financial sector firms expecting to lose some business from standalone FinTech operators.

Blockchain is one technology which is gaining traction in the FinTech space as it offers cost savings and greater transparency. Although PwC says that there are 700 firms entering the space with 150 of them designated as “ones to watch” the poll shows that 61 per cent of insurance companies are “not at all” or “only slightly” familiar with the technology.

PwC’s Steve Davies commented: “Blockchain and disruptive ledger technologies offer a once-in-a-lifetime opportunity for financial services companies to transform the way they do business. The lack of understanding of blockchain technology and its potential for disruption poses significant risks. The firms that do not take the time to understand the impact are underestimating the opportunities and threats that blockchain can provide.”

Interestingly, one area of tech is not keeping up with financial firms’ expectations. PwC found that while 40 per cent expect customers to use their mobile apps, only 20 per cent do.
Canadian insurance bodies unite against auto-crime
Two Canadian insurance organizations have announced a partnership to tackle the issue of auto crime. The Insurance Bureau of Canada and CANATICS, Ontario-based non-profit focused on fighting insurance crime will work together to detect and investigate organized criminal activity.

Garry Robertson, IBC's National Director of Investigative Services, said: "This partnership with CANATICS will be very important. IBC has the mandate to coordinate organized crime ring investigations and provide police and prosecution support. Access to CANATICS alerts should greatly improve the effectiveness of our investigations thereby bringing the fraudsters to justice sooner and reducing the impact of fraud on honest policy holders."

CANATICS members represent around 75 per cent of the Ontario auto-insurance market.
MENA region insurance sentiment slips
The insurance industry’s measure of sentiment for the Middle East and North Africa has declined in the past year. The MENA Insurance Barometer from the Qatar Financial Centre reveals that 61 per cent of insurance chiefs are confident that premium growth will outpace economic growth in the region, down from 70 per cent last year.

Unsurprisingly, insurance executives are concerned about geopolitical stability in the region but overall there is a positive outlook for the MENA region.

Changes expected by insurers include a shift towards growth in personal lines rather than commercial and a third of respondents believe that foreign insurers will see their market share in the region decline.