Blockchain based smart contracts have the potential to benefit the insurance by streamlining current activities and opening new markets for low cost and low premium products. The insurance can take advantage of blockchain to digitize and streamline administration of existing processes and utilize the technology to offer new products and services where transparency, trust, and simplicity offer value.
Digitization the administration of policies would not only reduce the cost of administering these products, but also simplifying payouts and claims process.
Parametric insurance is an agreement to make payment upon the occurrence of a discrete event: temperature, rain or lack of rain, ….
All advantages and drawbacks have been thoroughly documented in my mind map:
I developed one Blockchain parametric insurance product during SBHack19, in a matter of some hours. While the product is functional, all economical aspects have not been taken into account.
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