Distributed ledger technology and commercial insurance

Abstract

The main purpose of this contribution is to evaluate whether Distributed ledger technology (DLT) could have such a disruptive impact on underwriting commercial insurance contracts, in managing claims and even perhaps in utilising insurance as a financial asset for insurance companies themselves. The position of the parties choosing to enter into an insurance contract by utilising the DLT in the manner described above is not altered in any fundamental manner under English law. It has been suggested that DLT could help to make the securitisation process work in a more efficient manner by enabling the insurance-linked security to be packaged into a token, potentially widening the investor base. In fact, this is a discussion that is a part of a larger debate on how the DLT technology should be regulated within the financial sector; but as far as securitisation of insurance is concerned, one feels that this is a rather premature prospect at this stage.