Flight insurance is getting properly decentralized.
Etherisc, a market-leading blockchain platform offering flight insurance, announced on Thursday that Chainlink oracles will now further decentralize its processes, improving the manifold inefficiencies in decentralized insurance. The price of Chainlink’s token, LINK, rose 11% on the news.
The announcement also marks the first integration of Chainlink’s technology into a non-fintech application.
The steep costs and time-intensive manual processing necessary to verify insurance claims make flight insurance a perfect use case for blockchain technology. Decentralization could help to ease the distrust between issuers and policyholders caused by the industry’s lack of transparency, delays and inefficiencies.
The new integration means that reliable flight status data—delayed or on-time—will be delivered by Chainlink’s oracle network. Using smart contracts to digitize claims and payout processes also reduces potential disagreements between insurance companies and claimants.
Decentralized flight insurance: a Proof of Concept
“Insurance companies stand to save money on the backend by cutting their overheard for processing claims, as well as improved brand recognition thanks to moving policy arbitration to a neutral third party protocol,” Etherisc stated in its blog post announcing the PoC.
Decentralized oracles allow a smart contract to interact with the off-chain data it needs in order to execute. In the case of flight insurance, secure and reliable flight status data is needed to trigger a payout.
The new Proof of Concept (PoC) ensures that this data delivery is more secure, reliable and completely decentralized, enabling flight insurance policies to be programmed to automatically, fairly and efficiently process claims.
As well as flight insurance, Etherisc offers hurricane protection and crop insurance; crypto wallet insurance, and collateral protection from loans. By further decentralising its product to incorporate Chainlink’s decentralized oracle feed, it provides a new way forward for a much maligned industry.
LINK up over 11%
The new integration went down well with Chainlink token holders too, and saw LINK trading at $3.23, and now ranked as the 16th largest cryptocurrency.
The decentralized oracle provider managed to outperform the entire altcoin market in 2019, and even outpaced Bitcoin on occasions. Many investors are confident that 2020 will bring further gains.
Speaking to Decrypt last month, Chainlink CEO, Sergey Nazarov highlighted the insurance market as one where the startup was seeing an influx of new users. But he added that, while it’s a highly lucrative industry, insurance is not the most straightforward application that Chainlink is targeting.
“Insurance is slowest—a very complex industry with a lot of moving parts and a lot of regulation,” said Nazarov.
But the oracle provider is not neglecting its fintech clientele. Last month it published new price reference feeds for off-chain price data, bringing the total number up to 25. As well as catering to the rapidly growing number of developers building DeFi applications on Ethereum, Chainlink is racing to incorporate its technology in more applications throughout the coming year.