For the most of the people, bitcoins and blockchain are just starting to be understood. On the other hand, these are rather complex technologies, which will become more understandable in their applications, which also include the insurance sector. (here is an accurate description).
The blockchain represents a great challenge for the insurance companies, which can bring many advantages, therefore some progress is being made by big companies and startups, the latter definitely more flexible in experiencing extreme solutions.
This is the case of Etherisc, a German startup that aims to be the first decentralized insurance based on Ethereum technology. Ethereum, in short, is a form of public Blockchain, designed to provide the ability to create, publish and manage peer-to-peer smart contracts.
So, what exactly is this startup, (also partnered by the EY advisory corporation) doing?
Etherisc co-founder Stephan Karpischek recently said in a press release: “The insurance industry is outdated and full of frustrations and conflicts of interest. For years, people and companies have been demanding a transparent, reliable and immediate insurance process. Etherisc is leveraging blockchain technology to meet market demand and bring insurance back to its roots as a company “safety net”. Etherisc’s decentralized platform will update the insurance industry by bringing back the long-standing values of transparency, efficiency and fairness that somehow have been lost along the way”.
In short, Etherisc’s mission is to transform the sector, bringing it back to transparency and reliability, removing the key role of companies, obviously, by leveraging P2P and smart contracts.
On its website Etherisc says it wants to build decentralized applications for the insurance industry, making buying and selling systems more efficient, reducing operating costs, increasing transparency and safety and making access to reinsurance investments more transparent.
What this actually means is still rather hazy, the only slightly more tangible term that has arisen so far is the Flight Delay ‘policy’, based on peer-to-peer risk sharing mechanisms and predictions to the edge of the bet. The company is, however, launching a fundraising system typical of the Ethereum blockchain, called the “Token Generating Event”, a sort of token auction (simplifying, a digital unit representing in this case a company’ share). Let’s say it’s an event that in the blockchain environment is equivalent to listing on the stock exchange in traditional markets. We will see the response of the Network and the stakeholders’ community.
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