Blockchain in Insurance Market Expected to Reach $32.9 Billion by 2031—Allied Market Research

According to a new report published by Allied Market Research, titled, “Blockchain in Insurance Market," The blockchain in insurance market was valued at $496.87 million in 2021, and is estimated to reach $32.9 billion by 2031, growing at a CAGR of 52.4% from 2022 to 2031.

Blockchain in insurance is a shared record-keeping technology in which the data is in cryptographically secured form. Blockchain technology enables data to be transferred in real-time between multiple parties in a trusted and verifiable manner while also bringing about considerable efficiency gains, cost savings, transparency, quicker pay-outs, and fraud reduction. The encrypted system that is utilized to secure digitalized data is referred to as the blockchain. It is used to digitally safeguard each financial transaction so that no one can tamper with it. Additionally, Blockchain can help new insurance methods create better markets and products.

Moreover, the primary goal of blockchain in the insurance industry is to protect against fraud in automated transactions by allowing them to track and manage physical data digitally. Insurers and customers can use blockchain technology to create smart contracts that manage claims in a transparent and timely manner. Therefore, blockchain technology improves the efficiency of fraud detection & prevention and with the adoption of blockchain technology in insurance, the market is expected to grow in future. Moreover, the increasing demand for secure online platforms is being driven by several factors, including the growing use of digital technologies, rising concerns about privacy and data security, and the need for remote access to services. This is expected to boost the blockchain in insurance market size.

Furthermore, major market players are undertaking various strategies to increase the competition and offer enhanced services to their customers. For instance, In Nov 2020 - Tata Consultancy Services (TCS), a leading global IT services, consulting and business solutions organization, has partnered with B3i Services AG, a global industry-led blockchain initiative, to design, develop and launch ecosystem innovations based on distributed ledger technology (DLT) for the insurance industry. This partnership leverages TCS’ innovation capabilities and B3i’s industry-leading production DLT platform, to accelerate the digitization of insurance for faster and more efficient delivery of tailored solutions to support risk managers, insurers, brokers, reinsurers, and industry service providers. Which provided a strategic advantage to the company and blockchain in insurance market growth.

Moreover, in September 2022, Dubai-based XA Group launched Addenda, a blockchain-based digital platform that allowed insurers to reconcile motor recovery receivables between each other. A decentralized and paper-based procedure that has long been a problem for the industry has been resolved by Addenda. During the platform's inception, a number of UAE-based insurance providers joined, including Abu Dhabi National Insurance Company, Emirates Insurance Company, Yas Takaful, and Oriental Insurance Company.

Based on enterprise size, the large enterprises segment attained the highest blockchain in insurance market share in 2021. This is attributed to the fact that large enterprises are increasingly adopting blockchain in insurance industry to fund their growth and expansion strategies. Further, with blockchain-based solutions, organizations have access to large volumes of trusted data of interactions within their own ecosystem.

Based on region, North America attained the highest blockchain in insurance market size in 2021. This is attributed to the fact that major retail banking service companies in North America are using blockchain services for the betterment of the customers and also to prevent the fraud. Furthermore, the surge in adoption of blockchain technology for KYC/ID fraud prevention and risk scoring, as well as the rise in internet penetration rate, is expected to boost market.

COVID-19 had a positive impact on the blockchain in insurance market. The pandemic has highlighted the importance of trust and transparency in the insurance industry. Blockchain technology provided a transparent and immutable record of all transactions, making it easier for insurers and policyholders to track and verify the status of claims, policies, and other transactions. Moreover, the pandemic has created new risks for the insurance industry, such as the risk of COVID-19-related claims. Blockchain technology helped insurers assess risk more accurately by analyzing data from various sources, including medical records, social media data, and other sources. Furthermore, the pandemic has highlighted the need for more efficient and cost-effective solutions in the blockchain in insurance industry, leading to an increased adoption of blockchain and IoT-based services. Therefore, the COVID-19 had a positive impact on the blockchain in insurance market trends.  

Key Findings of the Study

• By component, the solution segment led the blockchain in insurance market in terms of revenue in 2021.
• By organization size, the large enterprises segment accounted for the highest blockchain in insurance market share in 2021.
• By application, the identity management and fraud detection segment accounted for the highest blockchain in insurance market size in 2021.

The report analyzes the profiles of key players operating in the blockchain in insurance market analysis such as Consensys, Auxesis Services & Technologies (P) Ltd., Amazon Web Services, Inc., IBM, Microsoft, Oracle, SafeShare Global, RecordsKeeper and Symbiont. These players have adopted various strategies to increase their market penetration and strengthen their position in the blockchain in insurance market.