Block Chain Application in Insurance Services: A Systematic Review of the Evidence

Abstract

The Insurance industry participates in various processes that are characterized by data exchange, which is modified or updated by many parties. Hence, the insurance industry can benefit from the adoption of blockchain technology. However, there is a lack of understanding of the technology, the legal implications and the issues in implementing the technology. This paper aims at finding potential opportunities for the insurance sector on the implementation of blockchain technology. It also discusses issues and concerns for insurance companies wanting to adopt block chain technologies. A search was carried out for relevant electronic bibliographic databases (searched by means of keywords), articles published in scientific journals, websites of consultancy firms and blockchain developers, and reference lists of relevant review articles. Articles were screened and eligibility was based on participants, procedures, interventions comparisons, outcomes (PICO) model and criteria for PRISMA (Preferred Reporting Items for Systematic Reviews). A total of 23 papers were finalized after scrutiny for this study whereby the results disclose that blockchain, as a single source of reality, has the potential to improve productivity and mitigate the complexity of the insurance processes. Examples of real-world applications and insurance use cases are presented to demonstrate the strengths & capabilities of the technology. This study also considers the present-day issues, risks and concerns in the implementation of the blockchain technology. Finally, the challenges and obstacles in the application of Blockchain technology in the Insurance Sector is highlighted and presented.

The state of art, opportunities and challenges of blockchain in the insurance industry: a systematic literature review

“…The current context is pushing the industry to urgently address these issues by identifying new revenue streams, transforming customer experience, and streamlining operations (Vandati et al, 2018). The insurance business has traditionally been considered old and slow in innovation (Kar and Navin 2020;Shetty, 2022). It has lagged many others in adopting digital technologies to transform its business and embrace customer-focused experience.…”

“…In the last years, we are experiencing the withdrawal of investments of companies who bet in blockchain and are now stepping back (Risius and Spohrer 2017). Many cases died in the Proof-of-Concept state or failed after reaching the real world (Almeshal and Alhogail 2021;Popovic et al 2020;Shetty et al 2022). Some examples of real products withdrawn are Guevara, founded in 2013, or Fizzy in 2017 as part of AXA.…”

“…Technology standardization, as technology is quite immature (Radanovic & Likic, 2018), there is a lack of an industry-wide definition with no clear winning solution (Malhotra et al 2022;Walsh et al 2021). It is unlikely that a single blockchain system will operate globally (Shetty et al 2022;Treiblmaier et al, 2021) and executives' fear of a wrong selection is preventing action, as opting for an erroneous technology would have a tremendous negative impact; Interoperability, with the existence of a multitude of different protocols (Sakho et al 2019) the coexistence between different blockchains is still an unresolved issue. The success of the interoperability between blockchain platforms will play a key role in the pace of adoption (Risius and Spohrer 2017).…”

“…Both factors determine a very complex IT landscape. Integrating new technology with existing IT processes and legacy systems is one of the most challenging and costly topics to be managed (Gatteschi et al 2018;Shetty et al 2022), with high switching costs, in terms of people, economics, and time. This concern has been barely investigated by researchers (Risius, 2017).…”

“…Emerging technology is considered a key lever to succeeding in business transformation. Among others, blockchain is considered the breakthrough that will support industry disruption (Shetty et al 2022). An increasing number of studies are focusing on ways of leveraging blockchain to impel change in their business (Zheng et al 2022).…”