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Insurance and Reinsurance markets play a crucial role in transferring risk. They provide safety and security through financial support against particular events where there is a fear of loss. Orchestration of business in Insurance markets is complex, highly collaborative and competitive in nature. High administrative costs, threat of disruption from tech giants and the need to upgrade an aging operating model, has urged the industry to think strategically about collaborative technologies and standards. Market studies have indicated significant savings can be realized, as well as the potential for new products.
Segments of Insurance market has seen limited success in adoption of Distributed ledger technology. Some unique challenges in adoption are:
- Ageing standards and operating models.
- Lack of Structured data hierarchies across the value chain.
- Operational deployment at scale across multiple organisations.
- Integration into existing enterprise infrastructure as well as two-way bridges to off-chain data sources.
- DLT being a relatively nascent technology, that is already fragmented with a number of platforms/products - more mature technologies may have been more successful in securing limited resources - e.g. RPA, AI
- Limited awareness and understanding at a senior level, amplified by blockchain suffering from a degree of "crypto-contagion"
- Change has to be implemented in a regulated environment consisting of service partners and interested third parties i.e. Brokers, Coverholders, Managing Agents, Members and Regulator.
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