Blockchain could hold a significant potential in changing the way the wholesale insurance industry operates, but re/insurers, underwriters, brokers and many other players will need to work together, PwC Bermuda reports.
PwC’s blockchain team, which was established in January, worked with Z/Yen in conducting a global industry survey.
The report ‘chain reaction: how blockchain technology might transform wholesale insurance’, conjoined with Long Finance, is based on interviews with over 50 brokers, re/insurers, regulators and trade bodies from across the global insurance industry. It finds and explains a number of practical uses for blockchain technology.
“The report concludes that not only does blockchain offer the promise of cost reduction and efficiency, but it could also enable revenue growth as insurers attract new business through higher-quality service,” said Arthur Wightman, leader and insurance leader of PwC Bermuda.
“Research by PwC finds that 56 percent of firms recognise the importance of blockchain, but 57 percent concede they do not yet know how to respond. We want to help firms make this leap.
“Financial technology solutions are becoming a catalyst for change and innovation in the insurance and broader financial services industry.”
The report shows that relationships with stakeholders, ranging from customers to regulators, will improve as errors are lowered and accuracy improved. It may even be a possible to reduce capital requirements as insurers on opposite sides of a transaction proceed to agreement more quickly.
Wightman said: “Further, as reinsurance is an important sector in the global economy as it transfers risk from organisations to insurers and therefore underpins large-scale business and trade globally, financial technology can also help the industry to discharge its responsibilities for the common good.”
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