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Blockchain Insurance Market Size

ID: MRFR//6484-HCR | 111 Pages | Author: Shubham Munde| May 2024

The integration of the blockchain era into the coverage market has been a transformative force, reshaping conventional practices and introducing novel efficiencies. Several marketplace factors contribute to the tremendous adoption and increase of blockchain within the coverage zone. Firstly, transparency and security stand out as pivotal elements. Blockchain's decentralized ledger ensures a transparent and immutable document of transactions, decreasing the threat of fraud and errors. The tamper-resistant nature of blockchain enhances information safety, fostering consideration among stakeholders.


Secondly, operational efficiency performs an important role in the adoption of blockchain in the insurance market. Smart contracts, which are self-executing contracts with the phrases of the settlement without delay written into code, automate and streamline numerous techniques. This automation now not only reduces administrative prices but additionally expedites claims processing, making it quicker and more correct. Insurers can benefit from fee financial savings and advanced consumer pleasure, leading to a greater competitive market. Moreover, the developing importance of facts in the coverage enterprise contributes to the adoption of blockchain. With the increasing quantity and complexity of facts, insurers face demanding situations in handling and defending sensitive information.


Blockchain offers a decentralized and cryptographic method to information garage, ensuring the integrity and confidentiality of information. This, now not most effective, enhances information management; however, it additionally allows seamless statistics sharing amongst stakeholders, fostering collaboration and innovation in the industry. Market factors also encompass regulatory compliance, as blockchain technology can help insurers assemble stringent regulatory necessities. The immutable and obvious nature of blockchain information simplifies the auditing method, making it easier for insurers to illustrate compliance. Additionally, clever contracts may be programmed to put in force regulatory necessities mechanically, decreasing the hazard of non-compliance and associated consequences.


Furthermore, the upward thrust of InsurTech startups and accelerated competition in the coverage market act as catalysts for blockchain adoption. Insurers are compelled to innovate and differentiate themselves to stay competitive. Blockchain generation offers a unique fee proposition, imparting performance gains, cost savings, and progressed customer reports, which could set organizations apart in a crowded market. Lastly, worldwide developments and the increasing digitization of economies contribute to the momentum of blockchain in the insurance zone. As businesses and people include virtual technology, the call for innovative and tech-driven insurance solutions grows. Blockchain aligns with this virtual transformation, positioning itself as a key enabler for the insurance enterprise to adapt and meet the changing wishes of its stakeholders.

Blockchain in Insurance Market Overview


Blockchain in Insurance Market is projected to grow from USD 4.06 Billion in 2024 to USD 41.20 billion by 2032, exhibiting a compound annual growth rate (CAGR) of 33.56% during the forecast period (2024 - 2032). Additionally, the market size for Blockchain in Insurance was valued at USD 2.92 billion in 2023.


Increased user experience is possible through technology, and many growth opportunitiesare the key market drivers enhancing market growth.


Figure 1: Blockchain in Insurance Market Size, 2024-2032 (USD Billion)


Blockchain in Insurance Market Overview.


Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review


Blockchain in Insurance Market Trends


A growing number of fraudulent insurance claims is driving the market growth.


The insurance industry is particularly susceptible to various types of fraud and data breaches, making it a prime target for fraudulent activities. Implementing blockchain technology in insurance has emerged as a promising solution to combat these issues and enhance customer satisfaction. The rising prevalence of fraudulent activities within the insurance sector has created a compelling need to adopt blockchain technology in its processes. Insurance companies are recognizing the shortcomings of their outdated legacy systems and are seeking to integrate more advanced systems that can effectively prevent fraudulent claims. Blockchain, with its decentralized public ledger accessible to multiple parties, offers a viable solution to eliminate errors and identify fraudulent activities. The fundamental feature of blockchain technology is its ability to validate and verify the authenticity of insurance policies, providing a comprehensive historical record of a policyholder's transactions. This improved efficiency in detecting and preventing fraud makes blockchain technology an attractive option for the insurance industry to enhance its security measures. This factor drives the market CAGR.


The insurance industry faces significant challenges regarding data breaches, fraud, and security threats. With the increasing occurrence of fraudulent activities in the insurance market, the demand for blockchain technology has risen sharply. Insurance companies recognize the need to replace their outdated legacy systems with blockchain solutions, offering enhanced security and fraud prevention capabilities. The validation feature of blockchain technology plays a vital role in verifying insurance policies and ensuring authenticity through authentication processes. By providing a comprehensive historical record of insurers, blockchain technology enables effective fraud prevention measures.


The growing digital landscape and technological advancements are also driving the adoption of Blockchain in insurance, with applications playing a key role in facilitating its implementation. As a result, the Blockchain in the insurance market is experiencing rapid growth, particularly in the banking, financial services, and insurance (BSFI) segment. Technological advancements offer significant growth opportunities, allowing for customized services tailored to the needs of insurance companies. Thus, driving the Blockchain in Insurance market revenue.


Blockchain in Insurance Market Segment Insights


Blockchain in Insurance Sector Insights


Based on sector, the Blockchain in Insurance market segmentation includes health insurance, life insurance, and title insurance. The life insurance segment dominated the market due to the inherent complexity and long-term nature of life insurance policies, which can greatly benefit from blockchain technology's transparency, security, and immutability. By leveraging Blockchain, life insurance companies can streamline various processes, including policy issuance, claims settlement, and underwriting, resulting in improved efficiency, reduced instances of fraud, and enhanced trust among customers. Moreover, integrating smart contracts on the Blockchain enables the automation of key life insurance activities such as premium payments and policy renewals, further simplifying and accelerating the overall process. These factors contribute to the significant adoption of blockchain technology within the life insurance sector.


Blockchain in Insurance Service Provider Insights


The Blockchain in Insurance market segmentation, based on service providers, includes infrastructure providers, application and solutions, and middleware providers. The application and solution segment dominated the market due to its specialization in creating and delivering blockchain-based applications and solutions specifically designed for the insurance industry. These providers are responsible for developing innovative platforms that streamline various insurance processes, including policy management, claims processing, and customer engagement, by leveraging the benefits of blockchain technology. By offering tailored and adaptable solutions, they effectively address insurance companies' unique needs and challenges, allowing them to harness the advantages of Blockchain's transparency, security, and efficiency.


Blockchain in Insurance Application Insights


The Blockchain in Insurance market segmentation, based on Application, includes payments, GRC management, death claims, identity management, fraud detection, and claims management. The claims management segment dominated the market because claims management applications offer enhanced transparency, Blockchain security, and efficiency in the claims process. By leveraging the immutable nature of Blockchain, these applications ensure the integrity of data, mitigate the risks of fraudulent activities, and enable real-time tracking and verification of claims. These advanced capabilities greatly improve the accuracy, speed, and reliability of managing insurance claims, resulting in heightened customer satisfaction and operational effectiveness for insurance companies.


Blockchain in Insurance Organization Size Insights


Based on the organization size, the Blockchain in Insurance market segmentation includes small enterprise and large enterprise. The large enterprise segment dominated the market because large-scale enterprises possess greater financial resources and infrastructure, allowing them to invest in and deploy blockchain solutions more effectively. They can incorporate blockchain technology into insurance operations, such as claims management, underwriting, and policy administration.


Figure1:Blockchain in Insurance Market, by Organization,2022 & 2032 (USD billion)


Blockchain in Insurance Market, by Organization


Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review


Blockchain in Insurance Regional Insights


By Region, the study provides market insights into North America, Europe, Asia-Pacific, and Rest of the World. The North American Blockchain in the Insurance market will dominate this market, owing to high investment in R&d. Launch of the advanced and high-end features in the technology will attract more demand in this Region.


Further, the major countries studied in the market report are The U.S., Canada, German, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.


Figure2: GLOBAL BLOCKCHAIN IN INSURANCE MARKET SHARE BY REGION 2022 (%)


BLOCKCHAIN IN INSURANCE MARKET SHARE BY REGION


Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review


Europe Blockchain in the Insurance market accounts for the second-largest market share; the adoption of blockchain technology in the insurance industry has improved user experiences and opened up numerous growth opportunities in the market. Further, the German Blockchain in the Insurance market witnessed the largest market share, and the UK Blockchain in the Insurance market was the fastest-growing market in the European Region.


The Asia-Pacific Blockchain in Insurance Market is expected to grow at the fastest CAGR from 2023 to 2032. This is because the adoption rate is higher, and the insurance industry faces severe fraud and risks in this Region. Moreover, China’s Blockchain in the Insurance market held the largest market share, and the Indian Blockchain in the Insurance market was the fastest-growing market in the Asia-Pacific region.


Blockchain in Insurance Key Market Players& Competitive Insights


Leading market players are investing heavily in research and development to expand their product lines, which will help the Blockchain in the Insurance market grow even more. Market participants are also undertaking various strategic activities to expand their footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. To expand and survive in a more competitive and rising market climate, Blockchain in the Insurance products industry must offer cost-effective items.


Manufacturing locally to minimize operational costs is one of the key business tactics manufacturers use in the Blockchain in the Insurance industry to benefit clients and increase the market sector. In recent years, the Blockchain in the Insurance industry has offered some of the most significant advantages. Major players in the Blockchain in the Insurance market, including Oracle Applied Blockchain, Microsoft, Algorythmixi, Xledger, Auxesis Group, Guardtime, AWS, Earthport, BitPay, Circle, BTL Group, ConsenSys., and others, are attempting to increase market demand by investing in research and development operations.


Microsoft Corporation is a renowned American multinational technology company headquartered in Redmond, Washington. The company is widely recognized for its flagship software products, including the Windows operating system, the Microsoft Office suite, and the Internet Explorer and Edge web browsers.Recently, Microsoft introduced Azure Blockchain Workbench, a comprehensive collection of tools designed to facilitate the rapid development of applications with minimal time investment.


Amazon Web Services, Inc. is a subsidiary of Amazon that specializes in providing flexible and scalable cloud computing platforms and APIs to individuals, organizations, and governments. It operates on a pay-as-you-go basis, allowing clients to access computing resources on demand. In collaboration with Luxoft Holding, a technology consulting firm, AWS has introduced certified blockchain solutions that can be deployed on its platform. Luxoft Holding utilized the Hyperledger Fabric network to implement a digital ledger solution that runs on AWS. This solution was specifically designed for the healthcare industry, enabling seamless integration between legacy systems and all stakeholders involved in the insurance claims process.


Key CompaniesIn The Blockchain In Insurance Market Include




  • Oracle Applied Blockchain




  • Microsoft




  • Algorythmixi




  • Xledger




  • Auxesis Group




  • Guardtime




  • AWS




  • Earthport




  • BitPay




  • Circle




  • BTL Group




  • ConsenSys.




Blockchain in Insurance Industry Developments


Here are some key developments related to blockchain in the insurance industry specifically in 2022 and 2023:


2022:



  • Major reinsurer Swiss Re launched a blockchain-based insurance trading platform to streamline transactions between brokers and insurers.

  • Insurance consortium B3i released a blockchain prototype for property catastrophe excess of loss contracts to improve efficiency.

  • Insurance giants AXA and Swiss Re used blockchain for the first automatic flight delay insurance payouts.

  • Lemonade insurance offered blockchain-based pet insurance to customers in the US.

  • The Accenture 2022 Insurance Technology Vision report found 78% of insurers planned to adopt blockchain in some form by 2024.


2023:



  • Insurwave, a maritime insurance blockchain platform backed by major insurers, expanded capabilities to cover over 100,000 vessels.

  • Allianz Re launched a blockchain pilot for parametric flood insurance to automate claim payments based on IoT data.

  • Startup Arbol developed a peer-to-peer climate risk coverage platform combining blockchain smart contracts with weather data.

  • The Blockchain Insurance Industry Initiative (B3i) consortium released a prototype for using blockchain in the tokenization of insurance assets.

  • Holistic security company Tusk Inc. partnered with insurtech company At-Bay to offer small business insurance on the blockchain.


Blockchain in Insurance Market Segmentation


Blockchain in Insurance Sector Outlook




  • Health Insurance




  • Life Insurance




  • Title Insurance




Blockchain in Insurance Service Provider Outlook




  • Infrastructure provider




  • Application and solution




  • Middleware provider




Blockchain in Insurance Application Outlook




  • Payments




  • GRC management




  • Death claims




  • Identity management




  • Fraud detection




  • Claims management




Blockchain in Insurance Organization Size Outlook




  • By small enterprise




  • Large scale enterprise




Blockchain in Insurance Regional Outlook




  • North America






  • US




  • Canada






  • Europe






  • Germany




  • France




  • UK




  • Italy




  • Spain




  • Rest of Europe






  • Asia-Pacific




    • China




    • Japan




    • India




    • Australia




    • South Korea




    • Australia




    • Rest of Asia-Pacific






  • Rest of the World




    • Middle East




    • Africa




    • Latin America





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