On November 16, our CEO Oliver Naegele and our COO Henrique Schulz had the honor to talk to the European Insurance and Occupational Pensions Authority EIOPA and promote blockchain and our Trust Provider Network to the insurance industry. We believe that this is the right time to address the industry because one month ago four of the most important insurers and reinsurers launched a consortium to study the technology. The consortium is called B3i and was founded by Aegon, Allianz, Munich Re, Swiss Re and Zurich.
It was clear in the meeting that the technology is going to flourish into this industry and that it will solve some of the pain points not only for insurers as well. Although, we, Blockchain Helix and EIOPA, agreed that regulation will be one of the keys to this process. This is not only because they are the rule makers but because they act as supervision authority as well and this implementation could allow them to follow the market in real time with access to standardized data.
Just to remember some points about insurance, as published by the McKinsey’ Insurance Cost Benchmarking, from 44% to 58% of all costs for insurers represents operational costs. Just for claims management in Property and Casualty (P&C) Insurance, the overall costs represent around 28.5%. If we look further to sales support costs, we will see that it represents 14.6% for P&C and 21.1% for Life Insurance. Keeping in mind that these two activities are mainly manually performed and though headcount-intensive, we see many operational risks and inefficiencies arising.
If we put these all together, we end up with a very expensive structure that’s neither efficient nor secure. Manual intervention leads to waste of clients’ time, operational risk, and bad data quality, increasing the probability of fraud and decreasing the overall client experience.
Finally, we believe that these all together could be improved through our Trust Provider Network. Optimizing time spent, improving clients’ experience and reducing overall costs. Well, let’s see how blockchain is going to evolve to this industry. We at least have very high expectations and from our side, we will push it in order to get traction as much as we can.