Global Blockchain in Insurance Market - 2024-2031

Overview

Global Blockchain in Insurance Market reached US$ 1.4 Billion in 2023 and is expected to reach US$ 15.0 Billion by 2031, growing with a CAGR of 34.5% during the forecast period 2024-2031.

Insurance companies automate workflows, save administrative expenses and simplify operations with the use of blockchain technology. Blockchain technology's safety features minimize fraud and data manipulation. As blockchain technology is built on cryptographic algorithms that guarantee data integrity, authenticity and secrecy, its implementation in insurance operations enhances cybersecurity and assists in identifying fraudulent activity.

Growing product launches by the major key players help to boost global market growth over the forecast period. For instance, on January 11, 2024, Nayms launched the First Institutional Tokenized (Re)insurance Marketplace on Base, Announcing its Next Investment Opportunity. The base is an inexpensive, safe layer-2 Ethereum solution. With this introduction, investors will find it easier to take advantage of the yield-generating (re)insurance options that are offered as a tokenized asset class on Nayms' marketplace.

North America is the dominating region in the market due to the current regulatory framework in the region accelerates entrepreneurship and innovation in the technology industry. Insurers and blockchain solution providers can benefit from the clarity and direction provided by regulatory frameworks and regulations about data protection, cybersecurity, digital identities and smart contracts, which promotes market expansion and compliance.

Regulators, insurers, entrepreneurs, academic institutions and technology suppliers are encouraged to collaborate and form strategic relationships in this region. In the insurance company, collaborative efforts foster innovation, industry consortia, pilot projects and standards development for blockchain technology, resulting in a thriving ecosystem that supports market leadership and competitiveness.

Dynamics

Technological Advancements

Technological adoption can drive the development of innovative blockchain solutions tailored for the insurance sector. Insurers leverage blockchain technology to create new products and services that enhance customer experiences and streamline processes. Innovations such as digital identities and smart contracts are made possible through technological adoption. Adopting blockchain technology helps to boost operational efficiency and cost savings for insurance companies. Blockchain streamlines administrative processes and eliminates manual errors. The efficiency gains translate into lower operational costs, improved underwriting accuracy and enhanced resource utilization, driving market growth.

Blockchain adoption enhances integrity, data security and privacy in the insurance industry. The policy data and immutability of blockchain records protect sensitive customer information and transaction details from unauthorized access and manipulation. Insurers can securely store and manage data across the insurance value chain, fostering trust and confidence among stakeholders. Blockchain technology has made it possible for many parties to share information. In this instance, the insurer can identify the real loss incurred by the insured parties by accessing their digitally stored health and job information.

Growing Number of Fraudulent Insurance Claims

Blockchain technology offers a transparent and secure platform for managing and storing insurance claims data. The immutable nature of blockchain records makes it difficult for fraudsters to enhance fraud detection, manipulation of data and prevention capabilities for insurers. By using blockchain, insurers can implement real-time monitoring, robust fraud detection algorithms and automated verification processes to identify and mitigate fraudulent claims effectively.

Blockchain's traceability transparency and features enable insurers to trace the entire lifecycle of insurance claims, from settlement and submission. An auditable trail of activity is produced by the blockchain, which records every transaction and modification and makes it available to authorized persons. The openness promotes responsibility among agents, adjusters and other parties engaged in the claims process and deters dishonest behavior. According to the data given by, Code F Solutions Private Limited, in India, only around 80% of the insurance claims are genuine and fraud claims make up 15% in one year.

High Initial Cost

The initial costs for the implementation of blockchain technology in insurance is substantial. The includes costs for developing blockchain solutions, training staff and integrating them with existing systems. For many small insurers, these upfront costs is prohibitive. Building and maintaining the required technology infrastructure for blockchain like servers and data centers is more expensive. Insurers need to invest in specialized hardware, security protocols, software licenses and network upgrades to support blockchain deployments, adding to the initial cost burden.

Tailoring blockchain solutions to meet specific insurance industry requirements and integrating them with legacy systems can incur additional costs. Customization efforts involve hiring blockchain developers, consultants or third-party vendors, leading to higher initial expenditures for insurers. cleansing and Migrating data from legacy systems to blockchain platforms is complex and costly. Ensuring data accuracy, consistency and compatibility with blockchain protocols requires resources, time and expertise, contributing to the overall cost of blockchain adoption in insurance.

Segment Analysis

The global blockchain in the insurance market is segmented based on component, type, enterprise size, application and region.

Blockchain in Insurance Solutions Segment Accounted Largest Market Share in the Market

Based on the component, the blockchain in the insurance market is segmented into solutions and services.

Blockchain solutions provide significant efficiency gains for insurance processes. The decentralized nature of blockchain eliminates the need for streamlining data sharing and intermediaries and automates workflows through smart contracts. The leads to faster policy issuance and improved operational efficiency for insurance companies. Blockchain technology provides improved security features including consensus procedures, encryption and cryptographic hashing. Blockchain records' immutability guarantees data integrity and builds stakeholder confidence. Insurers securely store sensitive customer information and claims data on blockchain platforms, policy details and compliance risks.

Blockchain offers traceability and transparency in insurance transactions. Each transaction recorded on the blockchain is transparent and auditable, providing a clear audit trail of activities. The transparency improves trust between insurers and regulators, leading to increased accountability and reduced disputes. Growing product offerings by major key players help to boost segment growth over the forecast period. For instance, on October 05, 2023, Insurtech Start-Up Breach Insurance launched Crypto Shield Pro which is Institutional-Grade Crypto Insurance. It is an innovative crypto custody insurance policy for institutional clients of crypto custody solutions.

Geographical Penetration

North America is Dominating the Blockchain in the Insurance Market

Canada and U.S. are technologically advanced countries in North America. There is an active community of blockchain-focused businesses, research institutes, technology corporations and qualified individuals in the region. The developments encourage the insurance industry's innovation and use of blockchain technology. Among the first insurance companies to use blockchain technology were those in North America. The insurers in the area realized blockchain could improve client experiences, lower costs, reduce fraud and increase operational efficiency. Market domination has been fueled by early achievements and case studies that have increased knowledge and trust in blockchain solutions.

Growing major key player initiatives for the blockchain in insurance helps to boost regional market growth over the forecast period. For instance, on September 13, 2021, US Insurance Giants UnitedHealth and Humana launched Blockchain Pilot. The two biggest health insurers in the region looking for blockchain technology to reconcile data in the health care system. The pilot program seeks to address a significant issue facing the healthcare industry, data reconciliation, which costs up to US$ 2.1 billion a year in expenses.

Competitive Landscape

The major global players in the market include Mapfre, Max Life Insurance, Auxesis Group, KM Business Information US, Inc, Bitfury, IBM, SAP oracle, MetLife and Consensys.

COVID-19 Impact Analysis

The epidemic accelerated the insurance industry's attempts at digital transformation. Blockchain applications in insurance have surged as a result of businesses using the technology in increasing numbers to improve client experiences, increase efficiency and streamline procedures. Blockchain technology enabled safe and transparent cooperation between insurers, reinsurers and clients at a time when working remotely is more common. Blockchain-based technologies supported company continuity amid lockdowns and mobility restrictions by enabling smooth data transfer, digital contract execution and claims processing.

The epidemic makes data security and privacy in the insurance industry even more crucial. Confidence in blockchain solutions increased as a result of the decentralized design and cryptographic techniques of blockchain, which improved data security, protected against cyber threats and fulfilled regulatory standards. Smart contracts built on blockchain technology simplified and expedited the processing of claims, cutting down on manual involvement, paperwork and processing delays. During the economic uncertainty of the pandemic, insurers used smart contracts to speed up claim payouts, increase accuracy and boost customer happiness.

Russia-Ukraine War Impact Analysis

Economic uncertainties impacted blockchain implementations in the insurance sector. Market uncertainties resulting from the war lead to cautious investment behavior among insurance companies regarding blockchain projects. Growing investment in new technologies could be reevaluated due to geopolitical uncertainties. Due to the Geopolitical tensions, there are increased cybersecurity threats like potential cyberattacks.

Insurance businesses using blockchain technology have to strengthen their cybersecurity defenses against attacks coming from malevolent individuals to safeguard smart contracts and sensitive data. The adoption and implementation of blockchain technology in the insurance industry are impacted by geopolitical events that set off updates or changes to regulations. Insurance businesses need to modify their compliance strategies and operational procedures in response to changes in data protection legislation, cross-border data transfers or regulatory frameworks for blockchain-based solutions.

By Component

• Solution
• Services

By Type

• Private Blockchain
• Public Blockchain

By Enterprise Size

• Large Enterprises
• Small and Medium-sized Enterprises

By Application

• GRC Management
• Death and Claims Management
• Identity Management and Fraud Detection
• Payments
• Others

By Region

• North America
  • U.S.
  • Canada
  • Mexico
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Spain
  • Rest of Europe
• South America
  • Brazil
  • Argentina
  • Rest of South America
• Asia-Pacific
  • China
  • India
  • Japan
  • Australia
  • Rest of Asia-Pacific
• Middle East and Africa

Key Developments

• On January 11, 2024, Nayms launched the first institutional tokenized (Re)insurance marketplace on base, announcing its next investment opportunity. The base is a cheap, safe layer-2 Ethereum solution. With this introduction, investors will find it easier to take advantage of yield-generating (re)insurance options that are offered as a tokenized asset class on Nayms' marketplace.
• On September 29, 2022, XA Group, a Dubai-based company launched Addenda, a Blockchain-based motor insurance platform in the market. The newly launched product will allow insurers to reconcile motor recovery receivables with each other.
• On October 05, 2023, Breach Insurance, a Boston-based insurance company launched Crypto Shield Pro, Institutional-Grade Crypto Insurance and Free Active Wallet Monitoring Service in the market.

Why Purchase the Report?

• To visualize the global blockchain in insurance market segmentation based on component, type, enterprise size, application and region, as well as understand key commercial assets and players.
• Identify commercial opportunities by analyzing trends and co-development.
• Excel data sheet with numerous data points of blockchain in insurance market-level with all segments.
• PDF report consists of a comprehensive analysis after exhaustive qualitative interviews and an in-depth study.
• Product mapping available as excel consisting of key products of all the major players.

The global blockchain in insurance market report would provide approximately 70 tables, 61 figures and 186 Pages.

Target Audience 2024

• Manufacturers/ Buyers
• Industry Investors/Investment Bankers
• Research Professionals
• Emerging Companies