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Blockchain has “massive potential” for the insurance industry but it is not the answer to every problem, an expert has said.
Nicolle Lindner, co-founder and head of financial services industry at Granite Financial Services & Unisys, said that while blockchain has potential to reinvent insurance and the financial services it is “not the answer to everything.”
“Blockchain is one of those things, like the internet, when it comes along people aren’t sure about the impact it is going to have initially,” Lindner told attendees at the Insurance Business Insurtech Summit.
Lindner noted that blockchain will allow the industry to use artificial intelligence, virtual reality and the Internet of Things, while also allaying the privacy fears of consumers as it rises as an answer to some difficult technology questions.
“Blockchain, in many ways, is the answer to a lot of these problems as it enables us to be secure but it doesn’t enable the data to be held in a way that other people can’t access,” Lindner continued. “In many ways, it is a very good solution for the problems that have been created by big data, the internet, mobile commerce and so forth.
“It actually brings together a lot of the principles of sharing and transparency and making sure that we all have equal access to information but it also still has that nice element of security to it. However, it is not a silver bullet to everything.”
One issue with blockchain that still needs to be resolved, according to Lindner, is its thirst for energy. Blockchain requires enormous amounts of computing power to function and, if power is severed, the entire chain can be broken.
Nevertheless, there is no denying that, regardless of its issues, blockchain is coming and will be here for the foreseeable future, but Lindner said that the industry is equipped to meet the challenges presented.
“For insurance and financial services it has massive potential,” Lindner continued. “It has a huge impact though on your infrastructure and will require an enormous amount of investment, but you are used to reinventing yourselves.
“You are hundreds of years old, you’ve survived wars, natural disasters, falls of government, you will be able to adapt and change but investment is going to be necessary because lots of new products and services are going to be created from this technology.”
