November 10, 2017 by Tessie Sanci, Associate Editor
The role of a broker will shift as blockchain becomes a more common tool in the P&C landscape and that shift might occur in the near future, according to Neil Mitchell, managing director at Marsh Canada.
“You might be able to argue that…the job of a broker will change fundamentally over the next 2 [to] 5 years,” said Mitchell while speaking on a panel at Insurance-Canada.ca’s InsurTech TO event earlier this week.
Blockchain consists of a shared ledger in which unalterable data can be shared between approved parties. It is possible that customers will be able to purchase a policy using this ledger and then receive automatic and automated payments should the customer ever need to collect on the policy.
“The role of an insurance broker has many functions. One of the big functions is [the broker’s] role in the transfer of data,” said Mitchell. “When you really think about what I can do as a broker between a client and a carrier, I’m presenting to that carrier all of the risk attributes of that client. In the context of blockchain, that all goes away.”
In a post-blockchain world, the broker will have to act as an advisor, not an intermediary, suggested Mitchell.
And brokers who think they can help customers by working with blockchain may want to reconsider that notion.
“The broker establishes the framework but I don’t see a broker sitting before a client and validating a fee or a commission based on [working with] blockchain because the customer is going to be smart, if not smarter, because they’re growing up with this language,” said Mitchell.
Mitchell was a part of a group of insurance stakeholders that participated in a project earlier this year designed to find the top uses of blockchain in insurance. The project, which was coordinated by Toronto’s Cookhouse Lab, an InsurTech innovation lab, presented a list of at least 30 ways in which blockchain could affect insurance. Those examples include crop insurance, parametric insurance, surety insurance, peer-to-peer property damage and ride-sharing passenger liability insurance.
This story was originally published by Canadian Insurance Top Broker.