Travel insurance goods supplied via blockchain are likely a few years away in the U.S. despite being a natural use case for the technology given how heavily regulated insurance is, according to industry experts.
Ryan Brubaker, chief information officer and executive vice president of operations of travel insurance provider Seven Corners, said that blockchain "certainly will have a position in travel insurance." "In terms of capabilities, there are a tonne of ways that blockchain will transform the insurance industry and the travel insurance industry."
Most people think of cryptocurrencies like Bitcoin or Ethereum when they hear the word "blockchain." Blockchain is the technology that powers cryptocurrencies, but it also has numerous other applications on its own.
Blockchain, at its heart, is an unchangeable ledger that keeps track of transactions and assets, some of which are physical, like money, and others which are intangible, like patents or copyrights. Because there are no middlemen because the ledger is copied, shared, and synchronised, all parties have access to the same data simultaneously. This makes tracking assets more affordable.
Without the need for human verification, the technology might, for instance, detect a flight delay and instantly send out a reimbursement.
FlightDelay, an insurance product that leverages blockchain to automatically issue policies and execute payouts for flight delays and cancellations on about 80 airlines, was introduced by German blockchain startup Etherisc in the beginning of this year. Only cryptocurrencies can be used to acquire policies and pay out claims. It is financed through a risk pool for insurance backed by investors.