Best Blockchain Insurance Companies

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Contributor, Benzinga
Updated: December 8, 2022

Insurance companies are using InsurTech and blockchain to create a more engaging and secure customer experience. Learn more about the top companies implementing this technology.

Best Companies using InsurTech to Disrupt the Insurance Industry

While the insurance industry may have a reputation for being a bit buttoned-up, some companies are using blockchain and InsurTech to disrupt the industry. Here are the ones you should know. 

Lemonade Home Insurance
Best For
  • Ratings, price and customization

Best for Renter’s and Homeowners Insurance: Lemonade

Lemonade is an online insurance company that uses blockchain and artificial intelligence (AI) to make applying for coverage and getting claims paid a breeze. It takes just a few minutes to get insured thanks to Maya, Lemonade’s AI bot. 

Many claims are also paid instantly. Lemonade also has a Giveback program. Any premiums that aren’t used to cover claims or pay for operating expenses are donated to a charity of your choice. 

Best Decentralized Platform: Etherisc

Etherisc offers a decentralized platform that can support a variety of insurance products. Its platform currently offers flight delay insurance, and it’s designed hurricane insurance, crypto and defi insurance and collateral protection for crypto-backed loans. 

Its insurance framework is free and open-source, and it has the potential to make insurance available to people and markets that haven’t traditionally had access to insurance. 

While Chainlink isn’t an insurance company, it solves an important issue facing decentralized insurance companies that use smart contracts. Chainlink is the go-to decentralized oracle network (DON). DONs integrate real-world data into smart contracts so they can execute efficiently without relying on a single, centralized data source.

Best for Specialty Insurance: Insurwave

Insurwave also isn’t an insurance company. Instead, it’s a software platform that uses cloud and cryptography technologies to connect insurance buyers, brokers and insurers. The platform streamlines the insurance buying and selling process, making it easier and more profitable for insurers to offer specialty insurance. 

Oscar Health Insurance
Best For
  • No-cost virtual and preventive care
securely through Oscar Health Insurance's website

Best for Health Insurance: Oscar

Oscar is a health insurance company that’s built around technology. It uses personalized data to help guide members to care options that make sense for them. It currently has more than 500,000 members across 18 states and offers individual, small group and Medicare Advantage insurance plans. 

Best for Peer-to-Peer Insurance: Teambrella

Teambrella is a peer-to-peer company with a goal of replacing insurance. You are part of a team, and the team works together to cover certain types of claims, like pet health or vehicle collisions. 

You submit a claim and the team decides whether to cover it and how much to pay. If the team decides to pay, each team member pays their share from their Ethereum wallet. Right now, Teambrella has peer-to-peer teams active in Argentina, Peru, Germany and the Netherlands with plans to expand. 

Root Insurance
Best For
  • Infrequent drivers
securely through Root Insurance's website

Best for Auto Insurance: Root Insurance

Root Insurance takes a unique approach to determining insurance premiums. You can download the Root app and drive for a few weeks. The app will analyze your driving habits. If you’re a good driver, Root will offer you a quote. 

You can also tailor your coverage. Root clearly explains which insurance coverage options are required in your state and which ones are optional so you can choose a policy that fits your budget. 

What is Blockchain? 

Blockchain is an umbrella term for a variety of technologies. It’s a decentralized database that’s stored on multiple, identical nodes around the world. If 1 node is updated, all the other nodes have to update as well. 

This means that there’s no centralized control. Updates must be approved by a majority of nodes or they can’t be made at all. This also makes it highly secure, as a bad actor would have to control a majority of nodes (51% or more) to make any changes. 

How is Blockchain Used in InsurTech?

The decentralized nature of blockchain makes it ideal for insurance innovations. Here are a few ways it’s being used. 

Smart Contracts

Smart contracts self-execute when the terms of the contract are met. This simplifies the claims process, as claims can be automatically paid out when certain parameters are met. There’s no central authority that decides whether or not a contract has been fulfilled; instead, the parameters of the contract are written into code. 

Peer-to-Peer Insurance

Peer-to-peer (P2P) insurance allows people to pool money using digital wallets. The group decides whether to approve claims and how much to pay. Each person has an interest in approving valid claims, as that determines whether their claims will be paid in the future. 

Reinsurance

Insurance companies use reinsurance to protect themselves if a lot of claims come in at once. For example, a hurricane could result in hundreds of claims coming in. Reinsurance can be complicated, though, involving a significant amount of labor and lots of room for error. 

Blockchain simplifies transferring information from the insurer to the reinsurance company. Since blockchain records can’t be altered, there’s less chance of error and claims can be processed faster. 

Fraud Prevention

The traditional approach to insurance leaves a lot of room for fraud. The claims process is slow, involves a lot of paperwork and can easily be exploited. With blockchain, there are permanent records of transactions that can easily be traced. Blockchain insurance companies could even take things a step further and coordinate records to prevent malicious actors from hopping from one insurance company to another. 

What is InsurTech?

Blockchain is one type of InsurTech. Let’s take a closer look at what InsurTech is and how it’s disrupting the insurance industry. 

Definition of InsurTech

InsurTech is a combination of the words “insurance” and “technology.” It refers to the technology insurance companies are using to improve the application and claims processes as well as customer service. It includes blockchain, AI, chatbots, wearables, big data and more. 

InsurTech may also be used to refer to companies that use this technology. 

How InsurTech is Disrupting the Insurance Industry

  • Chatbots provide personalized customer service 24/7.
  • Blockchain speeds up claims processing. 
  • Blockchain simplifies verifying customer identities. 
  • Data analytics makes premiums less expensive. 
  • Data analytics allow insurance companies to use a pay-as-you-go model. 

Getting the Most Out of Your Insurance

Digital insurance companies are reinventing the industry. Buying an insurance policy and filing a claim is easier than ever. Learn more about getting the most out of your insurance with Benzinga’s guides. 

Frequently Asked Questions

Q

What are some other ways healthcare uses blockchain?

A

Healthcare can use blockchain to store and transmit patient information in a secure way. For example, insurance companies need medical records to decide whether to approve a claim and how much to pay. 

 

Getting this information can be a tedious process. Blockchain can be used to share information from multiple providers with insurance companies while keeping the information encrypted and compliant with privacy laws.

Q

How does blockchain keep my data and private information safe?

A

Blockchain keeps data safe through its decentralization. All changes are made through consensus, and a bad actor would need to control a majority of blocks to compromise data. A private blockchain can be tightly controlled, only allowing known organizations to join, which keeps your information safe.