Bitcoin is one of the world’s first crypto currencies. Defined by the Oxford dictionary as “a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank," Bitcoin allows transactions to occur independently of any banking institution, making it disruptive in its own right.

However, the key technology which allows crypto currency to exist is called “blockchain”. Email was the application that ran on the internet, similarly bitcoin is the application that runs on blockchain. I believe that bitcoin will be remembered as the innovation that brought blockchain technology into our day-to-day.

A blockchain is a database with the following characteristics:

• It is public, meaning it is not owned by a single person or company.
• It is decentralised, which means it is not stored in a central location but across several computers around the world.
• Its synchronicity means every decentralised copy of the database is always the same.
• It is secured through cryptography encryption.

Blockchain is a perfect example of “business unusual”, with this technology posed to have a major impact across all sectors. The insurance sector could be disrupted significantly in the near future and this represents an exciting change in the industry with insurance potentially becoming cheaper, more inclusive and more personalised. Within the insurance industry, the application of this technology has been referred to as peer- to-peer insurance and/or decentralised insurance. 

Regulators and governments around the world have struggled to regulate the blockchain due to the decentralisation of the technology. This decentralisation effectively means that if the regulator identified a specific instance of the blockchain that they believe is non-compliant with laws and regulations, it will be impossible to stop this due to the fact that every node in the network will have an identical copy of the blockchain. Regulators are going to have to investigate new and innovative ways to regulate the blockchain.

ain in achieving their target operating models. The FinTech sector of the insurance market is seeing large amounts of investments and acquisitions as part of this strategy.

The industry is weighing up the first mover benefits versus the risk of the unknown, and in the next couple of years we are going to see a great deal of change within the industry with blockchain becoming more of a recurring enabler.