La Parisienne Assurance Taps into Sigfox for Blockchain-Based Insurance

French insurance outfit La Parisienne Assurance and Sigfox, a global communication network provider for the Internet of Things (IoT), have partnered to deliver a new kind of blockchain-based insurance. La Parisienne deals in a specific kind of insurance, which offers white label insurance to distributors (currently over 200 partnerships in 13 different European countries) and has over 30 live products available today in the form of Application Programming Interfaces (APIs). La Parisienne is significantly expanding its range of products on usage-based and parametric insurance. Such insurance can be fully automated, which is where blockchain comes in. Leveraging smart contracts (using private blockchain), La Parisienne can automate policy underwriting and claims lifecycles for certain simple insurance products for connected objects, using public (weather, pollution, traffic) or private triggers (from IoT networks). Sigfox can provide a number of private triggers, based on sensor information, to activate insurance and calculate premiums in real time.

The firms showcased a use case at the Digital Insurance Agenda conference in Amsterdam earlier this year in the personal mobility space. Electric scooters equipped with an IoT sensor triggered an insurance smart contract in real time, leveraging the start and stop messages sent through the Sigfox network. The firms are in the current process of industrialization.

La Parisienne’s blockchain platform will allow a number of new market opportunities for insurance that rely on connected objects. The benefits of automating simple usage-based contracts are interesting and potentially highly lucrative. First and foremost, La Parisienne will be able to offer insurance for low-premium products that are not financially-viable with human-based insurance. Lower administration and claims costs, automation, and the use of IoT sensors mean the firm can provide coverage for products and usages that were previously deemed too expensive to insure. Further, automated smart contracts can not only eliminate manual paperwork, but also simplify what are sometimes complex insurance proceedings for end users, raising the marketability of insurance in general .

Second, La Parisienne’s technology platform has a wide target audience, and is open to insurers and non-insurance specialists alike. The firm provides a public API portal to allow for fast integration and short Time to Market (TTM) for potential providers. The idea is that any stakeholders that are not necessarily experts in insurance, such as automotive Original Equipment Manufacturers (OEMs) or Managed Service Providers (MSPs), would be able to easily leverage the platform and provide simple automated insurance using connected products. While the current focus is on testing viability in the mobility-based market (cars, bikes, scooters, etc.), the application potential is relatively large (in smart homes and buildings, for example).

Blockchain-based smart contracts are a highly anticipated technology platform that will enable a number of interesting use cases. The ability to automate simple contractual processes empowers not only the payments space, but also associated scenarios, such as usage-based insurance settings. IoT sensors can provide the triggers for those contracts in real time and for actual usage, thereby offering insurance providers the possibility to customize offerings on a mass-market platform.

Such a technology is likely to play very well with regulation too, such as the upcoming E.U. efforts to establish an IoT security certification framework, as discussed in ABI Research’s blog “ENISA’s new role under the E.U. Cybersecurity Act.” Premiums could vary automatically depending on the certification level of an IoT product, for example, creating an interesting segue between cybersecurity insurance and IoT usage-based insurance. The potential offered by blockchain in the insurance space is certainly set to be significant within the IoT realm.