How could the INSURANCE sector harness blockchain?

Lunar Station
4 min readApr 21, 2021

Written by @RealScrout

What is Insurance?

Insurance helps you protect yourself from events that could happen, and on occasion, will happen. For instance, you can get home insurance against fires and burglary, for your workplace and when you die. The insurer will calculate the risk of these events happening, and you pay a premium (the price you pay), so if an event you have insured against occurs, the insurance company will pay you for the damage. (A highly liberal view of it, however, that is the general gist of it).[1]

How does/ could blockchain come into the insurance market?

Naturally, the blockchain has various benefits (which I shall refrain from explaining here, however, if you’d like to learn more about blockchain, check out this instructive article and then come back) arguably various use cases for it in the insurance market. Pwc, the second largest accounting firm, employing over 24,000 individuals in the UK, is looking at blockchain to help manage insurance claims and reduce fraud cases.


Blockchain allows for more transparent and more efficient bookkeeping and claiming for both the insurer and customers through the blockchain ledger. The ledger eliminates duplication of data entry through the ability of networks to reject duplicate or fraudulent claims/ data as they all analyse and compare the same ledger. Therefore, all information will be constantly current, accurate and automated, reducing error through the reduction of paperwork and usual manual processes.

As it can be readily accessible, any customer’s information can be found relatively quickly, and all previous claims can be found on their account, much like tracking an address on Like current non-KYC networks, client accounts can be anonymised. Only the client and the insurer can identify statements and limit external individuals from identifying them (assuming an online insurer doesn’t make it private). Having this capability allows for speedy settlement times, efficiency and clarity. Hence, claimants and insurers are less likely to have an error. In the unlikely case that there is one, it can be easily identified and tracked. The blockchain also allows for increased resilience within the network because there won’t be a single point of failure, allowing data to be secure and significantly reducing the risk of client data loss.

How could the insurer eliminate the trust factor, so they don’t have to rely on the claimant’s word?

One such example of trustless data that insurers can use may come from oracles. An oracle is a tool that allows for the transfer of off-chain data into a blockchain network — for instance, tracking the temperature of all the rooms in an office building complex onto a blockchain that energy companies can read to predict various loads on the grid.

A project which is currently using this is Vechain. They use blockchain and IoT technology to provide a logistics solution for companies in the cargo and transportation industry. Hardware oracles (devices that can collect local environmental data) can be used on long haul freight shipping, for instance, and actively track the environment both in a cargo container and the local weather and location of the cargo. [3]

This allows insurers to modulate the customers’ insurance premium depending on the vessel’s location, how rough the local environment is and if there are any interruptions within the journey. This can be valuable for customers as having real-time data can allow for cheaper insurance rates if the cargo is travelling through ideal environments and ahead of schedule.

Throughout the article, we have explored the benefits of blockchain and how it can be harnessed by insurance companies to reliably track, trust and alter premiums for individuals and industry. These developments can pave the way for more transparent, more trustworthy interactions between clients and insurers with, hopefully, lower rates in the future.




References: (2019). What is insurance? [online] Available at: [Accessed 21 Apr. 2021].

2: Blockchain in the insurance sector [online] Available at: [Accessed 21 Apr. 2021].

3: (2019). VeChain. [online] Available at: [Accessed 21 Apr. 2021].



Lunar Station

A decentralized VC with unique technical, advisory and community building capabilities. Telegram: