Blockchain in Insurance Market - In-Depth Analysis by Size

Blockchain in Insurance Market Overview

The global Blockchain in Insurance Market size was valued at USD 1.40 billion in 2023 and is projected to reach USD 355.5 billion by 2032, growing at a CAGR of 85.1% from 2024-2032.

The blockchain technology in the insurance industry is an emerging solution that offers a decentralized and shared digital ledger for recording transaction histories. This technology enables transparency, making it easier for insurers to prevent, detect, and counter fraud in claims. By transferring claims to a blockchain-based ledger shared across a peer-to-peer network, insurers create an environment where modifying or tampering with data becomes incredibly difficult. This provides a secure framework for managing claims, ensuring that all parties involved can trust the data’s integrity.

• Currently, the blockchain insurance market remains in its early stages, with most projects still in the concept or pilot phase. However, companies are actively exploring various use cases for blockchain, particularly in the realm of automated claims management. The adoption of this technology is largely driven by the need for greater transparency, efficiency, and fraud prevention in insurance transactions. As insurers continue to test and refine blockchain models through internal prototypes, the potential for its widespread application grows.
• In the coming years, the blockchain technology in insurance is expected to transform the industry by offering smarter, more efficient ways to handle claims. The use of smart contracts, for instance, facilitates automated, transparent, and responsive claim management for both insurers and customers. As the market matures and investments increase, blockchain’s role in reshaping the insurance landscape will likely become more pronounced, fostering a new era of innovation in risk management and claims processing.

Market Dynamics and factors for Blockchain in Insurance Market

Drivers

Blockchain for Customer Retention

• One of the primary business goals of any insurance business is customer loyalty. Insurance companies are constantly looking for new ways to improve customer satisfaction and increase their customer orientation. For example, many insurance companies invest in loyalty programs that offer points-based benefits. Blockchain can facilitate this and even take it to the next level, enabling a platform that allows easy exchange of points between different loyalty programs - a loyalty exchange platform. virtual loyalty. Blockchains with smart contracts can be applied to provide consumers with low processing costs if underwriting and claims processing can be automated based on defined rules and the availability of reliable data sources. Payments to these covered consumers can be made when a claim is submitted. And then it can be easily paid for by accessing a verified database, thanks to smart rules that consider the user's profile on the social network, as well as changes to the user's account. markets can help predict possible fraud. Blockchain can also help leverage knowledge of customer preferences in real-time, allowing end users to "become moderators" of the platform. This gives customers the ability to redeem, such as airline points for restaurant points, which implies that customers can choose the reward that suits them best. This effectively increases their freedom of choice and provides a better approval platform for the insurer. Accordingly, this will contribute to the growth of Blockchain in the Insurance Market during the forecast period.

Restraints

Changing Regulatory Standards of Technology

• Blockchain in insurance technology is under constant development. These advances affect the current regulatory standards. The use of technology is also affected due to this factor. Regulatory authorities find it difficult to cope with advancements in technology. With such technological advancements, regulatory bodies need to understand what the current regulations lack and how the rules can impact overall technology applications. Uncertainties in regulations remain a concern in the blockchain in the insurance market. At present, the lack of regulations is likely to restrain the adoption of blockchain technology in most application areas, such as financial services, telecom, government, and retail. The adoption of blockchain technology in the insurance vertical is affected by uncertain regulations and the lack of common standards for drafting the transactions of cryptocurrencies on blockchain technology.

Opportunity

Innovate Products and Services for Growth

• We see three ways blockchain can facilitate the growth of insurance companies: improve customer engagement, enable product offering that benefits emerging markets, and enable the growth of IoT-related insurance products. The potential that blockchain offers in these areas is fundamental in its use as a distributed and trusted platform for customer-controlled personal data, peer-to-peer (P2P) insurance, and contracts. smart co. Customer participation. An important lever for improving customer engagement through blockchain lies in the area of ??personal data. Customers' fear of losing control of their data as soon as it is transferred to a company and their frustration with having to repeat data entry processes can be resolved with a client-controlled blockchain to verify identity data (see KYC use case) or medical/health data. Personal data does not need to be stored on the blockchain; it remains on the user's device. Only its verification, for example through a doctor and related transactions (for example, an examination taking place on a certain date) is recorded in the blockchain. Here, scale is key to realizing the benefits of blockchain, as it requires a sufficient number of stakeholders to reuse verified data.

Challenges

Technology Limitations in Terms of the Scalability and Security

• Due to consensus-based confirmation mechanisms and continuous copies, as well as the increasing amount of data stored (defined as immutable), the scalability of the blockchain system is a challenge. While there are newer blockchain implementations that have fewer performance limitations, high-speed/high volume transactions, real-time data collection, and high-volume data storage are not areas. blockchain's intentions. Recent incidents have shown that in a blockchain ecosystem, new types of attacks are emerging. These are much less understood and, therefore, less mitigated than what happens in conventional database architectures.

Segmentation Analysis of Blockchain in the Insurance Market

• By Type, Public Blockchain dominates the Blockchain in Insurance Market. Owing to shared networks being typically focused on online hacker attacks, public blockchains are targeted at maintaining a high level of security standards. One of the key draws for any public blockchain enterprise is true decentralization. A public blockchain is a multi-tenant environment where the computing space is shared with several other clients. Various government bodies over the globe are integrating conventional systems with cloud technologies in the current day. The demand for public blockchain is high as it offers cost competitiveness to enterprises.
• By Application, the Smart Contract segment is expected to dominate the Blockchain in the insurance market. Customers and insurers should use blockchain-powered smart contracts to manage claims in a transparent, timely, and verifiable manner for efficient claims handling. more streamlined, and improved customer experience. A smart contract is a type of insurance contract or insurance that pays when specific predefined criteria are met. Smart contracts are stored in a decentralized environment with no manipulation or intermediaries, which means they can only be settled on the blockchain with complete transparency and no involvement of the People. In addition to improved transparency, smart contracts offer various additional benefits, such as faster payments, cheaper administrative costs, and lower insurance premiums due to the absence of third parties.

Regional Analysis of Blockchain in the Insurance Market

North America is anticipated to dominate the insurance industry due to the early adoption of blockchain technology, the majority of institutions have invested in Blockchain insurance technology due to its many advantages. The revenue growth in the North American market is mainly due to the region's increasing investment in blockchain technology and the rapid development of management solutions to enable data security, prevent cyberattacks. and ensure the security and privacy of Data. Furthermore, the introduction of advanced and premium features in technology is creating greater demand in this region. The blockchain insurance market in North America is expected to witness strong revenue growth during the forecast period due to the presence of major players in the industry in the region including Oracle, Microsoft, BlockCypher Inc, Circle Internet Financial Limited, IBM Corporation, BitPay, and ConsenSys.

• Developing economies in the Asia-Pacific region offer unprecedented opportunities to test low-cost innovations and open regulatory frameworks for blockchain technology in the insurance market. Emerging economies in the Asia-Pacific region represent an unprecedented opportunity to test low-cost innovations and the open regulatory framework of blockchain technology in the insurance industry. As insurers are expected to increasingly rely on the growing adoption of IoT for data collection in emerging economies, blockchain-based implementations could significantly increase their effectiveness. overall process and allows insurers to capture sensory information in a secure environment. and anti-forgery methods. For example, ICICI Lombard uses AI in health insurance claims to identify any fraud. All authenticated and stamped transactions are difficult to modify and can be verified using AI for real-time settlement. For example, China, despite tough regulations imposed on some crypto-related activities, is now moving forward on its own with a vision of integrating blockchain technology into state plans. and even included it in the thirteenth plan, the five-year plan, which includes a government development roadmap from 2017 to 2023.
• The Europe region is expected to grow at a significant growth rate during the forecast period. The European Insurance and Occupation Pensions Authority (EIOPA) published a Feedback Statement on blockchain and smart contracts in insurance. The document provides a high-level summary of the responses received from stakeholders during a public consultation on the topic as well as EIOPA’s reactions to them. The region will contribute to high profitability and demand in the forecast period. Growing high investment in R&D, the launch of the advanced and high-end features in the technology will attract more demand in this region.

Top Key Players Covered Blockchain in Insurance Market

• Ardor
• Adnovum
• Swisscom Blockchain
• Applied Blockchain
• Algorythmix
• Auxesis Group
• AWS
• Bitfury
• BitPay
• BlockCypher
• BTL Group
• Cambridge Blockchain
• ChainThat
• Circle
• ConsenSys
• Digital Asset Holdings
• Earthport
• Everledger
• Factom
• Guardtime
• IBM
• iXLedger
• Microsoft
• Oracle and other major players.

Key industry development in the Blockchain in Insurance Market

• In June 2023, JP Morgan has teamed up with six major Indian banks—HDFC Bank, ICICI Bank, Axis Bank, Yes Bank, IndusInd Bank, and its own banking unit in Gujarat—to pilot blockchain technology for settling interbank dollar transactions. The pilot will utilize JP Morgan's Onyx blockchain platform to streamline and enhance the efficiency of cross-border financial transactions. This collaboration aims to improve transparency, reduce costs, and expedite the settlement process, marking a significant step in the adoption of blockchain in the Indian banking sector.