Breaktheblock: The Insurance Industry Can Be Disrupted by The Blockchain Technology
Last month, RS Components teamed up with Simply Business, to bring to life the first blockchain and insurance themed “hackathon,” called #BreakTheBlock. There is no doubt that blockchain is visibly disrupting the financial service sector as the number of open blockchains, cryptocurrency projects and private ledger platforms used internally by companies is growing exponentially.
#BreakTheBlock was an event primarily designed to see the ways in which the insurance industry is going to be impacted by the increased prominence of blockchain technology, but also to help the dev community within London.
The event lasted only three days, but it was long enough to get a lot of traction from both developers and other people in the industry. The main challenge was to discover innovative user propositions using blockchain technology that are new in the insurance industry. To make it more interesting, and to get people to hack RS hardware rather than only software, we challenged teams to also incorporate IoT smart devices, where they could.
The runners up were:
- ICOsurance, whose team used blockchain to insure initial coin offering (ICO) investors against cyber-security attacks
- Re X, who used blockchain to improve efficiency in the reinsurance market
- My Claim Dossier, who created distributed ledger architecture that can retain any customer’s full claims history
Interestingly enough, the winning team, Coders Without Insurance used Ethereum to develop a fully autonomous weather insurance platform for organisers of outdoor events such as festivals, with automated claims payouts based on weather, smart contracts, SMS push notification, APIs and Internet of Things (IoT) sensors.
The team received £5,000 from the organisers of the event, plus extra Raspberry Pi’s, touch screens and sensors from RS seeing as they used a Raspberry Pi for their entry.
Following the inauguration, we caught up with the team leader, Christoph Burgdorfer and the other developers, Miguel Ribeiro, Muhammad Dadu, Harry Wiseman and Candy to hear more about their demo device.
The IoT demo device in the above picture is a simple Raspberry Pi with a SenseHat on running a Ethereum full node. It collects sensor data and sends that data directly to a predefined Ethereum smart contract.
Here’s what the Coders Without Insurance had to say about the event:
Q: You are the winner of the #Breaktheblock hackathon, can you explain in layman's terms what the project is all about?
A: Our idea was about using connected information such as weather, weather forecasts and weather sensor data to create a fully automated insurance system. Organisers of events can insure their event against rain, for example. The insurance payout is calculated based on the weather forecast information, historical data and how far the event is in the future. In the event of rain, which is detected by a distributed network of IoT devices (in our case Raspberry Pis), as well as weather information available on the internet, the insurance premium payout is triggered automatically.
Q: What does the future of blockchain technology look like to you?
A: Blockchain technology will enable us to add additional layers to the Internet. Currently, the Internet is a “network of information”. In other words, the network is used to transmit information between the users. However, blockchain technology will enable us to build without a central gate-keeper:
- “Network of trust” where trust is verified between the users
- “Network of value” where tokens containing (non-monetary) value can be transmitted between users without intermediary
- “Network and database of immutable data” that contains information which nobody can tamper with
- “Network of identities” that enables users to have verification of their real world identity
These are just a few ideas. Bitcoin is just the tip of the iceberg. The technology has potential for so much more.
We think what Blockchain technology needs nowadays, is a great user experience where everyone can understand its potential and everyone enjoys using it. We’re not there yet by miles, but part of our day-to-day job at “This Place Ltd,” where four out of our five team members work, is exploring how user experience and design can bridge that gap.
Q: How did you come up with the idea?
A: We were enjoying the nice roof terrace at Simply Business’ office and saw that they had a barbecue. We thought about how nice it would be to have barbecues there. But then the rain started to fall. That was the moment we came up with the idea to create a system that allows for insuring barbecues against rain.
After we spoke to an insurance professional, however, we were told it’s not possible to insure experiences and we would have to think of something that would suffer a quantifiable loss in the event of rain. This is when we pivoted from barbecues to festivals or large sports events.
Q: How did you come up with the name of the team?
A: It turns out we didn’t have insurance, so we thought we would appropriately call ourselves “Coders without Insurance”. As a team, four of us also work together on a day-to-day basis, as we’re working for This Place Ltd, a Shoreditch based User Experience and Design agency.
Q: Did you find Raspberry Pi a good board for creating your project?
A: Yes, we were very pleasantly surprised with the Raspberry Pi’s capabilities and the modularity of how it can be configured. We used the sensor board and also played around with the LED light board. The touch-screen was also impressive.
Q: Do you think what you created is a good scalable business solution?
A: Yes, our idea is to create a platform that enables anyone to create so called “index insurances”. These are insurances that are triggered if certain pre-determined parameters (indexes) are triggered. Those indexes could be determined from distributed sensor networks such as Raspberry Pis or regular web API’s.
Q: Would you consider creating this as a real business and if yes, are you looking for investors?
A: At this point, we’re exploring the potential at This Place Ltd. Investment is not our top priority. Advice around how to roll this out could be more valuable.
The slides of the presentation alongside with some pictures of the demo can be found here: https://www.slideshare.net/thisplacestudio/breaktheblock-insurance-blockchain-hackathon-presentation
In conclusion, there is definitely disruption potential in all industries!