Hype, Boom, Bust and Recovery: How Blockchain May Yet Prove Its Worth to Insurers

As the world economy and the insurance industry struggle to recover from the COVID-19 pandemic, associated lockdowns and constrained economic activity, blockchain technology has been in the news a lot.

From cryptocurrencies to enterprise blockchain to decentralized finance (DeFi) and nonfungible tokens (NFTs), blockchain has proved it can help with decentralized efficiency, work as a store of value through tumultuous times, and generate new methods to obtain capital returns.

While each of the varied blockchain technologies (cryptocurrencies, enterprise blockchain and so on) is at a different stage on the Gartner Hype Cycle, the insurance industry is following the movements and like many other industries, slowly looking to embrace the technologies.

The Hype Cycle is a useful tool to gauge expectations for a technology over time. Generally, technologies peak fairly early in expectations, then plummet, but eventually normalize to a plateau.

Within the insurance industry, enterprise adoption of various blockchain tools should be expected to pick up over the next decade, following the maturity of the technology along the Gartner Hype Cycle.