Blockchain in Insurance - and why it's not about blocked drains

So, how are blocked drains going to disrupt the insurance market ?


This is a question I was asked recently in a lift (for US readers, elevator!) that was descending on the outside of the iconic Lloyd’s of London building on Lime Street.  I pondered the question whilst enjoying the novel view of The City afforded from a building which defies architectural norms and gives the appearance of being built “inside out”.


When completed in 1986 the Richard Roger’s design was considered futuristic by placing service equipment, such as ducting and lifts, on the outside of the building, thereby better using the internal space.  At the time this unique approach was considered as ground-breaking and innovative.

As a building it would probably baffle those who established the original insurance market in London in 17th Century.  In some ways however whilst the building was considered advanced in 20th Century, now we're in the 21st Century the market itself has retained an aspect unchanged from its 17th Century origins - that of providing a physical marketplace. 


When one considers other financial markets that have transitioned to a virtual world through the adoption of trading technology - London Stock Exchange, NYSE, etc. the London Insurance Market is now almost unique in conducting business face-to-face.  Perhaps it’s by virtue of location ? The London Metals Exchange Price Discovery Ring, located within a few hundred metres of the Lloyd’s building stands out as about the only other remaining physical trading platform and that’s only for price discovery, the majority of trading now conducted via its electronic platform.


So, what could be about to disrupt a market that has robustly survived several centuries?  And what does it have to do with blocked drains?


The answer is, of course, not about blocked drains, or block trains (which someone else mentioned).  What the question was really about was “How is blockchain going to disrupt insurance?”.  Such is the general lack of awareness in the insurance sector of a technology that is currently infiltrating the banking, payments and currency exchange world, that many insurance practitioners are simply unfamiliar with the term.


Awareness of blockchain in the insurance sector is however changing.  Rapidly.  There are an increasing number of blogs, Linkedin posts, Instech groups, Fintech startups, accelerator programmes and innovators who’re all helping to build awareness of what (according to futurologists) could be as disruptive and revolutionary as the Internet was.

For some further insight around the market, the potential and the growing buzz, take a look at the blog written by Paolo Cuomo.  Additionally, it’s worth considering other technology advances, as described in Robin Merttens blog about Instech, and thinking how these could align with blockchain to be doubly disruptive.  We live in interesting times and, thanks to technology innovation, the times are becoming more interesting more quickly!