The insurance industry has not yet been fully disrupted as the sector moves and evolves very slowly. Although the reinsurance sector has witnessed continued technological advancement, there has been little or no change in its core operating model. There is a growing acknowledgement that the insurance industry is at an inflexion point and that digitization / technology needs to be embraced to respond to the challenges at hand. In Africa, some of the issues of utmost concern to reinsurers are the high outstanding cedant balances, evolving regulatory environment, volatility of results and a very competitive marketplace. Different companies and industry initiatives worldwide are exploring the business potential of blockchain /DLT technology across the (re)insurance value chain.
B. BLOCKCHAIN AND SMART CONTRACTS
Blockchain is a distributed and tamper-proof digital ledger that provides a shared single source of the truth between multiple trustless parties using cryptographic technology to allow each participant to utilize the ledger in a secure way without a need for third parties. According to Frost and Sullivan, blockchain technology has the following properties: