information released to date hasn’t described in detail what the solution
entails technically, apart from noting that it will use VeChain’s VeChainThor
blockchain. It does, however, mention the use of “advanced IoT devices and
smart contracts” within the insurance industry in order to deliver “instant
compensation.” It also mentions preventing fraud and controlling prices in the
seem, then, that what PICC, VeChain and DNV GL have in mind is a platform that
uses IoT devices to speed the processing of insurance claims and payments,
while also mitigating the risk of fraud.
to envision how this might work: IoT devices could monitor insured assets for
signs of damage. For example, an IoT device could determine when a car has been
in an accident or a tree has fallen on a house. When those devices detect
damage, they could then begin an automated claims process that would deliver
virtually instantaneous payment to insured parties.
addition to helping keep clients happy, the process could save money (at least
when performed at scale) because it would reduce the need for human staff to manage
claims. And it would help prevent PICC’s clients from making fraudulent claims,
since the company would rely on IoT devices to report damage.
clear, those potential advantages are speculative and based on what PICC and
its partners could have in mind. For now, it remains to be seen exactly what
their initiative might produce and how exactly it will work in the real world.
also be noted that, to date, there hasn’t been proof that IoT devices can do
things like determine when a tree has fallen on a house. It seems possible to
develop monitors like this based on what does currently exist, but it does not
seem that such a solution is currently available to PICC and its partners to
grab off the shelf and start plugging into a blockchain. The solution will
require some significant development.
Use Case for Blockchain-Based Insurance
of a blockchain to improve insurance claims processing is not a novel idea, nor is the application of IoT devices to
there have so far been few real-world examples of either of these ideas in
motion (though there has been quite a bit of patent activity related to them) — and no
examples of a blockchain and the IoT being used in conjunction within the
insurance industry, as PICC is proposing.
part of the reason why the PICC blockchain initiative is so significant. PICC
is a large state-owned insurer in China, which provides a range of different
insurance products. Although it’s not clear how soon it might begin putting this
blockchain and the IoT to use, its concrete plans to do so suggest that
blockchain technology within the insurance industry is moving further from
theory and closer to practice.
announcement is also notable as another win for VeChain, which has made other
headlines in recent months in areas like vaccine tracing in China (an initiative in
which VeChain is also partnering with DNV GL). For those interested in
enterprise blockchain applications in the Asia Pacific region, VeChain seems
like a blockchain vendor to follow.