Insurance News

Fitch: blockchain a potential game-changer for insurance

insurance umbrella

Despite reservations that blockchain is unproven, Fitch Ratings views the technology as a potential game-changer for the insurance industry over the long term. The rating agency does not envisage blockchain affecting insurer ratings over the short or intermediate term.

They believe the next three to five years will clarify the advantages and risks.


Insurance is well suited to blockchain because of the large number of complex transactions between multiple parties. Hence Fitch sees a potential for significant cost reductions and improved processing speed. They highlight the potential to capture more customer-specific data from remote electronic devices.

Blockchain can enhance underwriting and pricing while simultaneously reducing fraud. Fitch points to the potential to boost speed and transparency in customer service via web-based tools.

Finally, they see a benefit in reducing distribution costs by optimizing product design and better understanding agent behavior.


The rating company highlighted the uncertainties. The rate of adoption is one of the critical questions, and part of the challenge is the uncertainty of investment costs compared to benefits. Additionally, they point to the legal, regulatory and security issues that need addressing to support adoption. Fitch also anticipates it could be tricky to attract and retain talent.

They mention the B3i initiative and the RiskBlock Alliance as tentative steps to explore blockchain. The Rating agency concludes that for insurance, the ultimate viability of the technology will depend on a group of industry leaders adopting it to gain competitive advantage.

They’ve released a premium report Blockchain and Insurance —The Trust Machine.

At Ledger Insights we have significant coverage of the insurance sector.