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The United States Federal Emergency Management Agency (FEMA) is exploring the idea of a blockchain-based property registry to streamline disaster insurance payouts.
In its latest National Advisory Draft Report to the FEMA Administrator, the agency indicated its interest in deploying blockchain technology in order to streamline disaster insurance payouts and improve the speed of disaster responses.
To achieve this, FEMA recommended the establishment of a blockchain-based property and land registry, containing all critical information needed to file an insurance or disaster assistance claim.
Cutting the rate of self-insurance for public infrastructure
FEMA suggested that such a registry would not only promote liquidation of an insurance policy such as a “disaster dividend” or a “harm’s way” claim but also reduce the rate of self-insurance for public infrastructure. According to FEMA, self-insurance most often means no insurance at all, which makes the government bear the expenses on unfunded disasters.
In the report, FEMA noted blockchain and other emerging technologies’ ability to improve resilience and recovery efforts in a disaster, as critical data can be stored off-site in a “highly-trusted, secure platform.”
Adoption of blockchain in the insurance industry
There are a number of examples of the successful implementation of blockchain technology in the insurance industry globally. Recently, the United Kingdom-based charity organization Oxfam International announced the success of its blockchain-based delivery system of microinsurance to paddy field farmers in Sri Lanka.
The company claimed that blockchain could transform and simplify the insurance claims process, which would result in reduced administration costs and a higher percentage of premiums being used for fully trusted pay-outs.
In April, the British Virgin Islands partnered with blockchain firm Lifelabs.io to launch an alternative crypto-enabled payment infrastructure for residents across the chain of islands. The partnership had a particular focus on using crypto infrastructure to support the reliable and swift transfer of aid and access to funds in emergency scenarios.