AXA, a major French insurance company, has just taken the step to offer blockchain based insurance. The product’s name is Fizzy – a „smart insurance” tool to check whether flights are going to be delayed.
The role of blockchain technology in flight insurance
According to AXA, the blockchain is going to perform two key roles: retaining an available report of the insurance coverage agreement within just a sensible agreement, and as a mechanism for triggering payment to the customer when a two-hour mark is passed. When buying flight delay insurance through Fizzy, the purchase is recorded on the Ethereum blockchain, making the contract tamperproof.
Fizzy offers parametric insurance, as in, it uses a parameter, the flight statistics, to trigger customer reinbursement. Compensation is automatic and immediate, and the amount returned is known in advance.
AXA representative Jean-Baptiste Mounier told CoinDesk in an email:
“The smart contract is the party that decides whether or not we should indemnify the policy holder and triggers a payment request to our system. The use of a smart contract to trigger claims will add trust in the insurer / policy holder relationship.”
AXA is not the first large company to use Ethereum. A German energy giant RWE released over 100 electric car charging stations connected to Ethereum’s public blockchain in the April of 2017.
Flight delay insurance isn’t novel. Travel insurance often provides coverage for flight delays over two hours. But dedicated insurance for just flight delays is uncommon — and operating it over the Ethereum blockchain is downright unique.
The company chose to use the Ethereum blockchain over a standard blockchain implementation simply because the Ethereum blockchain supports smart contracts and the standard blockchain does not, which makes the former ideal for products that involve the issue of an actual contract to provide a product or service.
For its initial launch, Fizzy is being tested only with flights between Paris and the United States, with the company hoping to expand the service internationally in the coming months.
Nevertheless, it’s an exciting development. It’s always great to see interest of big companies in cryptocurrencies and the blockchain technology, which could be another step to their worldwide popularisation.