Page 28 - The Insurance Times October 2024

reports, BIMA had enrolled over 35 million users by 2023, cesses. By leveraging blockchain's transparent ledger, insur-
illustrating the potential for scaling such solutions(Allianz X). ers can mitigate fraud, improve accuracy in claims settle-
ment, and enhance trust among policyholders
The Impact of Mobile Insurance on Fi- (ITCDIAEurope).
nancial Inclusion
Blockchain for Trust and Transparency
Mobile insurance models allow users to pay small, afford-
able premiums on a pay-as-you-go basis, which suits the ir- In regions where trust in formal financial institutions is low,
regular income patterns of low-income individuals. More- blockchain's transparency and immutability offer a unique
over, mobile technology has drastically reduced the cost of solution. Transactions recorded on a blockchain cannot be
tampered with, which increases trust between the insurer
policy administration and claims processing, making
microinsurance economically viable for insurers. The ability and policyholders. For low-income populations who may
to automate these processes through mobile technology has have experienced fraud or delays with traditional insurance
significantly contributed to the increase in insurance pen- systems, blockchain offers a secure and transparent alter-
native.
etration.
However, despite its potential, blockchain technology still
However, challenges remain, particularly around digital lit-
eracy. While many low-income populations own mobile faces regulatory hurdles in some regions. In many countries,
phones, not all of them are digitally literate enough to navi- there is a lack of clear legal frameworks for using blockchain
gate insurance applications independently. Efforts to edu- in insurance, creating uncertainty for both insurers and cus-
tomers. As regulatory bodies become more familiar with
cate users about how to access and use these mobile-based
blockchain, clearer guidelines will be necessary to fully real-
services are necessary to ensure the continued success of
such platforms. ize its potential in expanding inclusive insurance.

Blockchain Technology: Building Trust Artificial Intelligence and Data Analytics:
Personalizing Insurance
and Efficiency
The use of AI and data analytics is revolutionizing how in-
Blockchain is another technology that has immense poten-
surers assess risk, personalize products, and engage with
tial to transform inclusive insurance by improving transpar-
ency, trust, and efficiency. For populations that have tradi- customers. AI-driven systems can analyze vast amounts of
tionally been excluded from formal financial systems due to data to create highly personalized insurance products that
cater to the specific needs of low-income populations.
lack of trust or accessibility, blockchain offers a secure, trans-
parent, and decentralized system that can eliminate many
of these barriers. AI for Risk Assessment and Underwriting
Traditionally, underwriting for low-income populations has
Etherisc: Blockchain-Based Insurance
Solutions
Etherisc, a blockchain-based decentralized insurance plat-
form, is an example of how blockchain is being used to de-
liver insurance to underserved communities. In 2024,
Etherisc continues to expand its reach, providing crop insur-
ance to smallholder farmers in East Africa. Using smart con-
tracts, Etherisc enables automatic payouts when predefined
conditions, such as insufficient rainfall, are met (Etherisc).

This model not only reduces operational costs for insurers
but also ensures that payouts are faster and more reliable.
Smallholder farmers, who often suffer from unpredictable
weather patterns, can receive compensation in a timely
manner without having to navigate complex claims pro-

The Insurance Times October 2024 25