Insurance + Blockchain Part 3：Principle analysis for Blockchain insurance

Blockchain is constructed by encryption ledger with point-to-point self-network, time order and immutability and distributed consensus mechanisms, so as to realize the whole network accounting and common notarization with the trust decentralization, based on computer algorithm not rely on the trust mechanism of the third parties, then to realize the point-to-point transmission of value.   Each node in the system can participate in the public network ledger, enter the historic Blockchain recording information by many times and recorded forever with immutability. The immutability and traceability of Blockchain make the data information on Blockchain with high safety and reliability, and build the authentication mechanism of “Internet trust”based on network consensus, then build a decentralized trust chain with immutability to ensure that the system is neutral and credible to any user, and create a highly secure transaction network environment for parties.

Blockchain is established on the Internet, any Internet port can access to Blockchain, any documents, physical or personal authentication or records can be recorded on Blockchain, then become the digital identity. Depend on the reliable and immutable database, Blockchain will completely change the ways for information registration and verification like identity register and asset register.The self-verification should not rely on the third party anymore. In the premise of permission, insurance company can verify and manage the whole information of personal identity, health records, asset information and so on. The reality and accuracy of data can be ensured, provide a network environment with reliable safety basement and transparent trusty environment for the Internet insurance business.

An important innovation of Blockchain is smart contract, realize the programmability of program contract by introducing the “script”. The code of contract will be automatically written into the code layer, and can not  be separated. Therefore, the contract should be definded by coding and fully automatic enforced, half-way interference is not allowed, and both contract parties can excute without trustness.

When the insurance events meet the condition trigger of insurance payment, the smart contract can execute automatically, start the insurance claims process, and realize the automatically payment. All of these should be effectively executed under the legal framework about “code is the law”, which greatly reduce the manual operation with high efficiency and immutability.

In addition, Blockchain combined with big data, which can realize the perfect conection between big data prediction analysis and automatic smart contract. As an effective quantify management tool, Blockchain transfer prediction to action, establish a set of automatic management system for “response-prediction-execution”.

Moreover, based on Blockchain, insurance customers can add the insured automatically, and establish the insurance management list for family type, then realize the deep combination of self insurance menu management with smart contract under the premise of privacy. In other way, it can help get through the whole chain of Internet insurance for execution and management, to provide a online trading platform for customers that based on network consensus and automatic execution mechanism, then gives birth to a mantual insurance organization with point-to-point based on information platform, promote mutual insurance into the 2.0 era.