The following is an opinion article written by Dimitris Hiotis and Aude Saint-Paul of Simon-Kutcher. The views expressed within the article are not necessarily those of Insurance Business.
Blockchain is a hype topic. But what can it be really used for? How can it really help the customer? A common reproach to blockchain-enthusiasts is that rather than looking for problems for blockchain to solve, they should focus on concrete challenges, especially customer pain-points, and identify solutions – whether these be using blockchain or not.
So, let’s look at an obvious challenge in the insurance industry: personal data handling. From an insurers’ perspective, it’s a technology and regulatory nightmare. And it’s also a customer’s nightmare.
An insurance customer typically faces two major pain-points.
First, the fear about losing control of personal data as soon as it is handed over to an insurer: are other providers going to gain access to my medical records via my health insurer? Or is there a risk that someone hacks their systems and gets access to my health tests results? What if they sell my data without my permission?
Then, very often, frustration with the need to repeat data entry processes multiple times (for example, when a client engages with a broker who works with multiple underwriters, all of which have to run through the same verification process).
These issues are particularly acute in health insurance, where clients are sharing sensitive data. So, how can we solve this problem? Could blockchain offer a solution? In our opinion, the answer is: very probably.
One of the root causes for the problems mentioned above is that at the moment, many insurers struggle to achieve a 360° view of their customers. The data may exist in one form or another but can be extraordinarily difficult to “stitch” together at an individual level.
Blockchain can enable “profile stitching” and do so in such a way that the data’s confidentiality and security are protected. Equally importantly, it can do so in a way that gives back control to the customer, by enabling each individual to control which organisations access their data.
How? Let’s focus on a high-profile blockchain start-up, Civic. The concept is a blockchain-powered authentication solution. It is essentially an identity verification process that is transferable from one service to another: a single input of a customer’s personal identity can be cross-checked by any organisation on the blockchain, without the customer having to provide the same data twice. This data is verified by Civic (or other identity verifying partners), attested and anchored to the blockchain in the form of un-decryptable data.
What is particularly interesting about this is that Civic doesn’t store any personal information on the blockchain directly. Instead, it stores attestations of this information for reference, thereby putting control of the data back in the hands of the customer. The customer alone has the private keys to access the information, meaning the consumers are the only people able to authorise access to their information in real time.
This is a highly relevant proposition for the insurance sector. Imagine a service provider, say a car insurance company, needs access to a client’s bank account information. After communicating with the user, the car insurer submits a data request to a prior validator, maybe a bank. This validator retrieves the hash for the requested information from the blockchain to attest it with the information that the client previously provided. If everything checks out, the validator is paid for these services, and the car insurer approves the client’s identity.
This example could be broadened to other insurance lines, in particular, health insurance.
Today, a massive challenge in healthcare is how to handle health records. As patients move between health providers, their data becomes scattered across different organisations, making it difficult to obtain a transparent, complete and accessible view of their medical history. This is where blockchain could help.
In fact, several start-ups are already working on solutions, such as Medrec or Medicalchain. Medicalchain uses blockchain technology to securely store health records. Medrec is developing smart contracts that link patients and providers to the addresses of existing medical records (meaning it does not even have to record the information directly; rather it encodes data that allows records to be accessed securely by patients, unifying access to data across disparate providers).
The list of examples like this one could go on and on, and it is no surprise that start-ups around blockchain are multiplying. It’s time insurers start thinking how they can leverage the potential of blockchain to boost the customer experience.
About the authors:
Dimitris Hiotis is a partner and global head of leisure, travel and transportation at Simon-Kucher. Aude Saint-Paul is a senior consultant at Simon-Kucher in London, and has worked on a wide variety of commercial programmes within the insurance industry as well as other B2B and B2C sectors.
Simon-Kucher & Partners is a global consulting firm specialising in TopLine Power®, which encompasses strategy, marketing, pricing, and sales. Founded in 1985, the company now has more than 1,200 professionals in 38 offices worldwide. The practice is built on evidence-based, practical strategies for profit improvement via the top line. Simon-Kucher & Partners is regarded as the world's leading pricing advisor and thought leader.