Blockchain: promises to revolutionise superapps and the trust factor in insurance
Sue Coulter, Head of Group Digital,& Julian L, Director of Digital Delivery and Innovation, AIA
Sue Coulter, Head of Group Digital,& Julian L, Director of Digital Delivery and Innovation, AIA
Digital adoption is changing every aspect of the insurance business.
The digital adoption trend started with consumers. Over time, digital enablers have gained footholds throughout our insurance ecosystem. Today, employees, agents, customers, and partners are using multiple digital touchpoints to carry out transactions and engage with insurance providers daily on superapps.
Digital adoption’s growth creates an opportunity for insurance providers to innovate. The vast amounts of data generated gives insight into user behaviour and helps insurance providers deepen our engagement opportunities with customers through advanced and predictive analytics.
This growth will come with an added responsibility. Application users today have an increasing awareness of data rights and a desire to control their data. This awareness has not yet reached a tipping point where users refuse to provide their data freely in a “trustless” world, but there is a need to plan and think about how the insurance industry can harness this data, while building transparency and trust with users.
Embracing blockchain technology’s rise
Blockchain technologies thus provide an opportunity for insurance providers to achieve this balance of data innovation and building user trust.
AIA is one such insurance provider in Asia which has jumped on this opportunity, having experimented with various blockchain-based pilots across their business groups.
AIA launched a blockchain-based data exchange in 2017 with a bancassurance partner, and followed up by piloting a coin-based incentive system for agents in 2019. Most recently, AIA tested using Non-Fungible Tokens (NFTs) to engage younger customers and agents.
The technology provides a unique proposition in terms of trust and transparency as compared to traditional data and integration platforms such as databases or data exchange platforms.
Web 2.0 vs Web 3.0
Before blockchain technology’s emergence, the internet followed a Web 2.0 environment characterised by user generated content and centralised services. Common Web 2.0 use cases that require a level of user trust include authentication using single sign-on providers such FacebookID, and payments using providers such as AndroidPay.
The above use cases rely on a trusted Web 2.0 provider maintaining that trust but does not provide users control of where or how their data is used after it is collected.
The application of blockchain technologies can create an evolution in the balance of control and trust if we instead use a third party that relies on public-private encryption where the private key is held by the user. This also gives the user control over where their data is shared.
The future could see Web 3.0, a blockchain powered web environment with decentralised trust models, change the insurance industry.
The Future Could See Web 3.0, A Blockchain-Powered Web Environment With Decentralised Trust Models, Change The Insurance Industry
There are many possibilities for Web3.0 enabled use cases on an insurance superapp. The customers’ user experience could be enhanced during the product offer stage. Potential customers could share health records via a Web 3.0 provider to get a quote for a product, and then remove access to their health data if they choose to reject the offer.
Users can also get more control over their transacted data.. Payment or claims data on a superapp can be done through a Web 3.0 provider integrated to providers and insurers. This ensures that immutable data is shared securely and more importantly, access can be reduced or revoked after completed transactions. Payment through a Web 2.0 provider requires the sharing of sensitive payment related details, which enables payment provides to accumulate large amounts of data, creating potential data security risks if they are targeted by nefarious actors.
In all these cases, the traditional model of sharing data with a trusted party is turned on its head with Web 3.0 and blockchain technologies creating additional models for engaging users and placing them in control of their own data.
The insurance blockchain revolution.
The user knows that their data is valuable and will share it to enhance their user experience with the right incentives. By leveraging Web3.0 blockchain, we can allow them to retain control of where their data goes - addressing the challenge of maintaining trust while pursuing data innovation.
There are plenty of opportunities for the insurance industry to continue building this trust and innovation. To get ready to meet customers’ Web 3.0 expectations, AIA is continuously testing and learning how to best to leverage this new technology. They are using the same approach to how they have scaled the use of cloud, digital, analytics and artificial intelligence which are now fully embedded into our core business strategy. strategy. This gives AIA the ability and opportunity to roll out our Web 3.0 strategy when the time is right.
Web 3.0 will be a critical building block of our future, and it is up to the insurance industry to embrace it and be part of this revolution.
