Building a blockchain insurance ecosystem in Singapore
For this week’s Insureblock’s episode we headed to Singapore to meet an interesting startup, called Inmediate.io. which utilises blockchain and smart contracts. We had the pleasure of interviewing its CEO, Otbert de Jong and CTO, Nelius Strydom.
Inmediate is the first Singapore digital broker. They operate a b2C platform for retail insurance and operate a b2b insurance technology distribution business. They have specialised in building a connectivity platform with insurance companies by creating an API network that enables them to offer real time processing of insurance. Now they are aiming to build a new age ecosystem by utilising blockchain and smart contract technology where insurance can be sold in a quicker and more efficient manner.
2 Minute Definition of Blockchain
Blockchain is a digital wallet that allows you to store information and validate that information in a decentralised way.
The traditional model in cryptocurrencies is one that allows you to run digital wallets for customers to make payments. Inmediate takes that very model to the next level by enabling their digital wallets to enable insurance contract information and allowing them to run standard insurance contracts for customers. This removes the ambiguity around policies and contracts as everything is hard coded onto the blockchain. The smart contract then allows you to monitor triggers against the blockchain, which when any of them are affected they can have a predetermined outcome.
Otbert and his wife were living in Singapore and needed to purchase an insurance policy for their car. They found the traditional local experience in Singapore was very inefficient and along with Nelius they set out to modernise it.
Whilst Singapore is renown for big very tech savvy with a high penetration in mobile devices. Its insurance digital penetration is significantly lower, compared to Europe, resulting in much lower sales conversion.
For Nelius, this presents a large market opportunity that leverages that clear Asian big tech infrastructure and large market of mobile users into one that successfully purchases insurance policies online. The reason he believes this hasn’t yet happened is that the traditional online buying process isn’t where it should be, especially when you compare it to the one in Europe. Nelius and Otbert believe they can rectify that.
The Inmediate Ecosystem
Otbert believes that if they want to have a smart contract based blockchain insurance, they require to have 3 stake holders: insurance companies, distributors and customers. These stake holders need to be able to work together in a unified way. Otbert and Nelius set themselves out to build a network in a similar manner that Visa has set up a payment network around a common set of standards. By getting these stake holders to agree to those common standards the participants can work together in a more efficient and easy manner to offer customers “smart insurance” presented in a unified way.
Why would insurance companies join the Inmediate Ecosystem?
The main benefit for insurance companies is in the cost savings. A smart contract based blockchain can completely transform the existing policy and claims process resulting in significantly lower administrative costs that traditionally supported those inefficient processes.
This new infrastructure openness up opportunities for insurance companies to develop new products for new markets in a more cost-effective manner.
Benefits for consumers
As insurance companies benefit from lower costs on the Inmediate Ecosystem they have the opportunity to offer their consumers more competitive pricing onto their insurance policies. Consumers will be able to get access to new insurance policies that presently do not exist. Policies themselves should become simpler and more straight forward.
Otbert believes that the main benefit though will be with regards to claims. The claims process will be clearer. Policies will be clearer with the unbundling of coverage.
Unbundling of coverage
A smart contract based blockchain can offer consumers clearer policies. In traditional policies there can be numerous components that a consumer may not want or need or even be aware of.
Otbert likes to use the analogy of a set price meal deal in a restaurant vs a, a la carte menu. His plan is work with insurance companies to strip existing insurance policies (set price meal deal) into its core components (a la carte menu). But they plan to go further and strip it all the way down to the meal’s key ingredients. Once all these core components are clearly identified an insured will have a much higher level of clarity in terms of what they are insured for, what are the triggers that trigger an action and what are the outcomes of that action.
These core components are coded into a smart contract and insurance companies can re-bundle these components if they choose to in a manner that can better reach their customers’ needs. End users and distributors will also have the possibility to unbundle and re-bundle insurance policies in a manner that best suits them.
Otbert and Nelius shares many other points in this podcast including their plans for the future and top tips for aspiring startups. If you liked the podcast please do review it on iTunes. If you have any comments, suggestions on how we could make it better please don’t hesitate to add a comment below. If you’d like to ask a question to Otbert and Nelius feel free to add a comment below and will get them over to our site to answer your questions.
You can download their whitepaper on Inmediate.io.