Insurtech, IoT and Blockchain Had a Baby and Called It…Tomorrow
Moving through Burke’s Bullshit Cycle will see hype recede and the real blockchain promise be delivered to real people. Insurance will become embedded into everyday life in ways you can’t imagine.
Imagine your car flips on the highway at high speed. Before it lands, onboard sensors have sent motion information to an insurance AI that has assessed the situation, sent an ambulance, determined a write-off was in the making and paid the value of your car into your bank account, executing on your smart insurance contract – before you hit the ground.
The Convergence VC Meeting © Jayne Russell
Convergence has a new meaning as Outlier Ventures applies it when it gathers experts in AI, blockchain, digital insurance and IOT. CEO Jamie Burke believes these and more elements of the fourth industrial revolution will give rise to the Converged Smart Economy – and we’ll live better for it.
That day has not yet arrived as blockchain moves through Burke’s Bullshit CycleTM, his own version of the tech hype cycle. But visionaries like AIA Edge’s Bob Crozier say it’s their job to, in his words, “try to cut through Burke’s BS curve.”
Bob Crozier, associate director of AIA Edge, and Paul du Long, managing director of Otonomos, at the Convergence VC Meeting © Jayne Russell
The height of the cycle is characterised by big promises and big money, but executives like Crozier need to determine how to achieve real business objectives like cutting costs and making insurance accessible to more people.
Insurance companies are known to be conservative by nature, but they can see small insurtech companies coming at them hard and fast. AIA’s Edge gives execs a chance to “get their hands dirty”, says Crozier. They’ve built a product on ethereum (but not put it in front of clients). They’ve worked with startups, even helping entrepreneurs get started with first steps like incorporating or getting bank accounts, a notorious problem in otherwise business friendly Hong Kong. Big companies can also throw startups a lifeline by providing license cover when introducing new ways of doing things to regulators. That way, products can get built and tested by innovators in AIA and their partners, rather than see regulatory newbies get swamped by legalese.
While the blockchain presents opportunities, the experts ran through a long list of challenges.
Doug Irwin, founder, Chain of Things, at the Convergence VC meeting in Hong Kong © Jayne Russell
Doug Irwin, founder of Chain of Things, deals in masses of data that can be challenging. One of his two verticals, solar energy, would see them collecting and maintaining data for individual solar cells in the blockchain. This is a massive amount of data that only AI can help trawl for efficiency maximising insights. And each piece of data on the blockchain must be maintained at a node, paid for with a tiny tax – but one that adds up.
Crozier talked about gathering fitness information from clients via FitBit as a hypothetical example. At half a million pieces of data per customer across, for example, 15 million customers, the pricing can be high. If it is priced in a blockchain currency that fluctuates wildly against fiat (normal currency, like the USD), then it becomes impossible to manage, cost-wise. Other solutions must be found to manage the storage capacity or reward those maintaining the nodes, says Paul du Long, managing director of Otonomos, a firm ‘converting corporate law into code.’
However, smart contracts that execute themselves via AI assessed claims faster and more accurate than human processors are the upside of the fourth industry wave coming to insurance. Crozier posits a future where insurance could quickly become “purchase to claim in 10 clicks.”
Photo: JD Hancock