Actuarial Studies Seminar - Arnold F Shapiro

Title: Blockchains: what they are, how they work, and their implications for the insurance industry

Abstract: Ten years ago, an elusive cryptologist named Satoshi Nakamoto proposed a peer-to-peer electronic cash system called bitcoin, which would allow online payments to be sent directly from one party to another without intervention.  The core technology behind bitcoin was the blockchain, a decentralized transaction and data management technology.  It featured a distributed, immutable digital record system that was shared among many independent parties and could be updated only by their consensus.

While blockchain started off as a core technology of bitcoin, it has emerged as an innovative tool with the potential to impact the way a number of online applications are designed. One of the most notable of which are full-fledged programs that are run on blockchains, called smart contracts, which are based on computerized transaction protocols that autonomously execute the terms of a contract.  Smart contracts have been mentioned with respect to a number of insurance application areas, including contract enforcement, the streamlining of business transactions, customer engagement and satisfaction, fraud monitoring and detection, product development, and the handling of reinsurance contracts.

The purpose of this presentation is to provide an overview of blockchains, including what they are, how they work, and their implications for the insurance industry.