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Hi Ram

Smart contracts take the power of Blockchain to the next level as it one of the key underpinnings of the technology . While the Blockchain holds the record of every transaction in an immutable distributed ledger, smart contracts help to define the rules of the transfer or value. Smart contracts are codes and rules that self-execute when an event occurs (These contracts sit on a distributed decentralized Blockchain and are therefore immutable. This allows for trusted transactions to be carried out between two parties who do not know each other. There are even discussions of making smart contracts legal or define regulations in them.

There are some good videos on Youtube that introoduce this concept more.

hope this helps

thanks

priya

Thanks for your comments and will read your blogs when time permits . My point 1 is not about settlements , it’s about the ability to have smart contracts shared between participants . Point 3 is about sharing data without intermediaries . I look forward to your next blog . Reinsurance is one of the other key applicability in Insurance which also benefits from the smart contracts Yes customers don’t decide architecture , they look for seamless digital experience where there is no need for reconciliations because of time delays

You raise an interesting question. Even though I am a blockchain enthusiast, I also share the sentiment it is not a panacea ( see my other blogs) but there are some applications that will see definite benefit of the technology In this case , in addition to what I mention in the blog : 1. Smart contracts not only allow automation but they allow the agreement to be done collectively by all parties and therefore can be auto triggered without objections. This also greatly improves regulatory compliance as regulations can now be proactively coded in the contract ( remember PPI! ) and not reactively implemented / checked 2. Blockchain’s applicability to any settlement is one of the best usecases as the shared immutable feature greatly reduces reconciliation and settlement time. Now whether reduced settlement time is a good thing is a question for another blog ( I have addressed it a bit in one of my blogs ) 3. Combating fraud will need insurers to share data and today that is done through intermediaries , again something blockchain eliminates Hope this clarifies the applicability of blockchain to this particular case Do keep a watch for my blogs and do challenge when you see blockchain may not be the answer

Hi Ramdas - thanks for your comment. Please read this paper by Bank Of England Staff to see the benefits of Blockchain in the settlement space :

http://www.bankofengland.co.uk/research/Pages/workingpapers/2017/swp670.aspx

Basically Blockchain provides you with an immutable , timestamped , distrubuted record of transactions that are agreed on the basis of consensus and removes the need for central party , therefore saving costs in reconciliation, operations and locked up capital

Hope this helps