Don Tapscott: Blockchain and P&C Insurance
To call Don Tapscott’s resume impressive is a massive understatement.
Ranked the second most influential Management Thinker and the top Digital Thinker in the world by Thinkers50, he’s authored 16 books including his most recent offering, Blockchain Revolution: How the Technology Behind Bitcoin and Other Cryptocurrencies is Changing the World. Widely recognized as a leading expert on blockchain, last year he also co-founded The Blockchain Research Institute with his son Alex.
In addition to everything above, he’s also the Chancellor of Trent University in Peterborough, Ontario and an Adjunct Professor at INSEAD, one of the world’s largest graduate business schools with campuses in France, Singapore and Abu Dhabi.
Go Magazine spoke with him about technology, innovation and how blockchain could impact the insurance industry.
GO MAGAZINE: After all of the work you’ve done throughout your remarkable career, what still excites and fascinates you about technology and innovation?
DON TAPSCOTT: Well, the sheer pace of innovation is astounding. It used to be that the plough you used was likely the exact kind of plough your grandparents used, and you had no reason to expect your grandchildren would use anything different. Now, it’s entirely reasonable to expect that every tool you use in life or business will be completely different 10 years from now.
I think we can attribute that exponential growth in innovation to digital technology enabling more global collaboration than ever before. I wrote about this in my Wikinomics book, and that idea – empowering individuals to collaborate in organized, decentralized networks – is also what drew me to blockchain.
Can you please tell us about the Blockchain Research Institute. What inspired you to co-found the organization with your son? What kind of work is being done at the institute?
In 2016, my son Alex and I published Blockchain Revolution, and found an incredible amount of interest from the public. Over time, though, we found that the book created more questions than answers. People seemed to understand why we thought blockchain represented the second era of the internet, but wanted to know how it would affect their industry, or their particular management role.
We started the Blockchain Research Institute to close that knowledge gap, and provide the definitive investigation into blockchain’s strategic implications. We’re conducting over 70 in-depth research projects on the impact of blockchain on everything from financial services and supply chain management to healthcare and the energy sector. It’s an enormous undertaking, but we’re really pleased with the level of growth and interest it’s spurred.
You’ve said that blockchain will change every industry. Where does blockchain fit into the insurance industry?
I always like to encourage people to consider how many day-to-day tasks in their business involve the use of intermediaries who serve no function but to build trust between parties. As a distributed, decentralized ledger, blockchain is a system where trust can be achieved without the need for those intermediaries, which means more security and efficiency in the way we transact digitally.
You can imagine what a system that creates one single, universal version of the truth can do for risk assessment or claims processing. It could enable more precise assessments of risk by providing immutable, verifiable records of insurees without sacrificing their privacy. Meanwhile, the use of self-executing smart contracts on the blockchain can make the process of filing claims far more efficient while drastically reducing fraud. The result is a more transparent, efficient and cost-effective system for everyone involved.
Will this affect the way insurance is bought and sold? What do you think the future of insurance may look like?
Blockchain is going to enable individuals to exercise a lot more sovereignty in how much of their personal data they’re willing to share with companies. With that in mind, I think we’ll see data and record-keeping become a much more important part of the sales process. Customers will have the option to drastically lower their rates by opening up more information.
On the whole, I think most markets are going to look a lot more open, transparent and fluid – almost to the point where they might resemble networks as much as they do markets.
What do you think insurance companies and insurance brokers should be doing now to prepare for the changes blockchain will bring?
My advice is to examine how you and your company add value to your clients. Do you function primarily to add a layer of trust between two parties? If yes, then it might be time to pivot and rethink how you add value. That said, if you add value beyond building trust, then you should be looking forward to the changes on the horizon.
In terms of your own career, what’s the best piece of advice you’ve ever been given?
I don’t know if it was advice I was given so much as it was a lesson I had to learn, along with a great many of my colleagues. When I began my career, it was at a time when you could enter your chosen field with a baseline of knowledge and more-or-less keep up. People felt they were safe in the assumption that things would not change so much that they should prepare for a life of constant re-learning.
Of course, that idea is laughable now. My colleagues and I had to adapt to a new paradigm where constant education is the norm. When I gave my address to graduates at Trent University this year, the first piece of advice I gave was to prepare themselves for a life of constant learning and re-learning. That’s the nature of the world they were born into, and it might be difficult, but its ultimately much more rewarding.
Is there anything you’d like changed about the process of buying insurance?
I think insurance is a good example of an industry with a lot of legacy structures in place that avoided disruption during the first era of the internet. Like many industries, there are processes ripe for disruption through blockchain. That’s something to be excited about, and something to prepare for.