This research has been gathered together with the collaboration of Control Expert Company, a German company dedicated to providing services to the core business of the automotive insurance industry. This research is mainly focused on the different applications that Blockchain technology offers the automotive insurance industry. Based on these applications, a process model is developed from the perspective of the service provider sector of the automotive insurance. Having the main focus in mind, this research will answer the following question: How does Blockchain technology benefit the Automotive Insurance Process?
The structure of this research will lead the reader through the evolution of the Blockchain technology and its features. First, a full definition of the technology will be explained. This will be followed by the generations of Blockchain and its classification. After that some history on regards Blockchain and the digital era will be mentioned. Such as the main innovations of the digital era, the creators of the technologies involved in Blockchain, and the main innovations within Blockchain.
As the Internet of Things has become more and more popular during the last years, it is not possible to ignore the huge impact that it is having on people's daily lives. IoT represents a network of devices such as sensors, vehicles, computers and more, which interact among themselves and exchange information. Here comes a very interesting subcategory of the IoT – The Internet of People. The Internet of People describes the exchange of data through different devices but related to the people, or, in other words, the information gathered comes strictly from people.
From this idea, the Internet of Money rises describing mainly how Blockchain and Bitcoin are changing the financial system. This is based on the idea of recording transactions in a safer way within a more decentralized system. Due to the strong disruption of Blockchain within different industries and the usability of the technology, it has been considered as an extra layer working over the internet. This is a new tier that enables transactions on a different level; permitting storage and record of data in a different way than a conventional database.
Table of Contents
1. Introduction
2. Origin and Definition of Blockchain
3. Blockchain 1.0
4. Blockchain 2.0
4.1 Smart Contracts
5. Blockchain 3.0
6. Blockchain in the Industries
6.1 State of the Art of Blockchain in the Insurance Industry
6.2 Service Providers Sector for the Automobile Insurance Industry (Control €xpert example)
7. Research Methodology
7.1 Research Design
7.2 Research Sample
7.3 Data Collection
7.4 Data Analysis
7.5 Limitations
8. Model Industry Using Blockchain
8.1 Architecture of the Automated Vehicle Crash Model
8.2 Finite State Machine.
8.3 Blockchain Process Model
9. Conclusion
10. References
Research Objectives and Focus
This master thesis aims to investigate how Blockchain technology can be effectively integrated into the automotive insurance industry to enhance operational efficiency, transparency, and trust, specifically from the perspective of a service provider.
- Evolution and fundamental concepts of Blockchain technology across three generations (1.0, 2.0, 3.0).
- Technical architecture and practical applications of Smart Contracts and Decentralized Applications (Dapps) within insurance processes.
- Integration of Telematics data and automated vehicle sensors into a permissioned Blockchain network.
- Development of a model to automate claim processing, reduce intermediate involvement, and mitigate fraud.
Excerpt from the Book
6.1 State of the Art of Blockchain in the Insurance Industry
Insurers and reinsurers are facing a high pressure to decrease costs. This issue is provoking insurance companies to come together and find a solution. In the past, this industry has already tried with no success and this time they do not want to miss the opportunity (Bézard, 2017).
Currently, the insurance market is facing several issues due to the complexity of processes of registration, claims and reimbursements. Part of these processes are still based on paperwork which inevitably involve human process errors, lost documentation, and non-compliance on insurance policies. Due to the reasons mentioned before, it is necessary to improve the processes, mainly in the insurance car niche. By implementing Blockchain technology in the auto insurance sector, there will be enhancements in the process, such as building trust among clients and insurance providers. The second level in the evolution of Blockchain – smart contracts – will permit self-execution of contracts, policies and payments avoiding wasting of time in long manual processes (Buntinx, 2017).
With Blockchain is possible to track all data that the driver is generating while driving the car. In the case of car sharing, it would be possible to measure for how long does he or she drives, the speed, routes, and the modifications and fixes to the car. This driving behaviour will enable insurance companies to customize insurances as “pay-as-you-drive” basis. Customers and companies would be benefit by improving relations. By this way, trust and transparency would be increased (Jimenez, 2017). Also, it would be very beneficial for the companies because when “pay-as-you-drive” insurance is offered, more people will be willing to acquire insurance, especially in countries where not all cars are required to do so.
Summary of Chapters
1. Introduction: Presents the motivation behind the research, focusing on the potential of Blockchain to solve inefficiencies in the automotive insurance sector via IoT and decentralized systems.
2. Origin and Definition of Blockchain: Explains the technical and business definitions of Blockchain, differentiating it from conventional databases and distributed ledgers.
3. Blockchain 1.0: Covers the first generation of technology, centered on Bitcoin, digital currency, and the fundamental peer-to-peer network structure.
4. Blockchain 2.0: Discusses the transition to Smart Contracts and Ethereum, analyzing the attributes of innovation and the platform's ability to execute automated agreements.
5. Blockchain 3.0: Examines Decentralized Applications (Dapps) and the focus on solving scalability, interoperability, and sustainability issues.
6. Blockchain in the Industries: Explores current implementations and statistics across various sectors, with a specific focus on insurance and service providers like Control Expert.
7. Research Methodology: Details the qualitative case study approach used to develop the model, incorporating industry data and expert perspectives.
8. Model Industry Using Blockchain: Introduces the proposed architecture for an automated vehicle crash model, including Finite State Machine representations and the integrated Blockchain workflow.
9. Conclusion: Summarizes findings and discusses the transformative potential of Blockchain in creating a more efficient, automated, and trust-based insurance environment.
10. References: Compiles all academic and industry-specific sources used throughout the thesis.
Keywords
Blockchain, Smart Contracts, Automotive Insurance, Telematics, Decentralized Applications, Dapps, Proof-of-Work, Proof-of-Stake, Finite State Machine, Service Provider Sector, Claims Processing, Disintermediation, Digitalization, Consensus Mechanism, IoT.
Frequently Asked Questions
What is the core focus of this research?
The research explores how Blockchain technology can be applied to optimize the automotive insurance process, specifically from the service provider's perspective.
Which key industry sectors are discussed regarding Blockchain adoption?
The study highlights the insurance industry as a primary sector for disruption, alongside discussions on finance, government records, and healthcare.
What is the primary research question?
The study seeks to answer: "How does Blockchain technology benefit the Automotive Insurance Process?"
Which research methodology was employed?
The author used a qualitative case study approach, utilizing conceptual methodology, historical records, and empirical data to propose a new process model.
What does the main body of the work cover?
It covers the evolution of Blockchain (1.0 to 3.0), the technical architecture of Smart Contracts, the role of Telematics, and a proposal for an automated accident claim system.
What are the primary keywords characterizing this work?
The work is defined by terms like Blockchain, Smart Contracts, Automotive Insurance, Telematics, Dapps, and Disintermediation.
How does the proposed "Automated Vehicle Crash Model" work?
It utilizes vehicle sensors to detect damage, records data on a consortium Blockchain, and triggers Smart Contracts to automatically handle claim verification, cost estimation, and payment.
Why is the "Service Provider Sector" significant in this thesis?
The author, collaborating with Control Expert, focuses on how service providers can leverage Blockchain to automate data verification, thereby reducing reliance on manual processes and human errors.
What role do Telematics play in the suggested Blockchain model?
Telematics provide the real-time driving behavior data (speed, location, impact severity) that feeds into the Smart Contract system to enable accurate and dynamic insurance assessment.
What is the conclusion regarding the implementation of the proposed model?
While the technology is currently in its infancy and faces scalability challenges, the author concludes that it represents a necessary and predictable path forward for the insurance industry to achieve automated, trustworthy processes.
- Arbeit zitieren
- Enrique Gil Ramirez (Autor:in), 2018, Applications of Blockchain in the Automotive Insurance Industry. A Model Development from the Perspective of the Service Provider Sector, München, GRIN Verlag, https://www.grin.com/document/926111
