Business-to-Customer Insurance

A British fittings manufacturer changed its strategy in 2005 so that it would be able to supply products to the international market at lower cost, and has been the global market leader in the premium fittings sector for years. Currently, the company handles bricks-and-mortar sales via a network of retailers comprised of wholesalers and property developers.

The company is placed under increasing pressure due to strong online retailers. Due to the order situation in the construction sector, the company’s target groups have reached their limits in terms of sales, and additional growth potential remains unused. This makes diversification into the fields of the Internet-of-Things and the SmartHome an attractive prospect.

XY Sense, an intelligent water sensor, informs the user about water damage and frost risk via an application. The company uses this to target the end customer, and expand its spectrum of services to include digital services. This scalability can also give rise to further expansions in linked service areas. Property and liability insurance can be offered directly to the customer via the existing smartphone application during the initial installation.

The integrated robo-advisor, a digital assistant, decides whether an expert need to evaluate the situation on-site in more detail, based on information on the household, family status, and the devices or values to be insured. The company considers a lump sum figure for this, as satisfied customers are more valuable than the loss caused due to attempted fraud, during the early stages of working in the SmartHome environment. The initial risks can be balanced out with subsidies from the sale of fittings. In a loss event, the insured uses the app to document the situation and will automatically receive a direct advance payment via the smart contract which has been saved. The customer can either use the payment for reimbursement or as credit towards the purchase of a reduced-price replacement via the online shop run by the company.

The information is documented in the blockchain via the customer’s app. Plumbing and heating companies commissioned by the company rectify the damage and also confirm the documented damage with an entry in the blockchain via the partner app. Documenting this in the blockchain ensures pseudonym-based transparency, and acts as proof for the British company and for those affected by water damage. A valuation of the app and services can also be permanently stored in the blockchain. Insurance transactions are processed via the internal captive set up specifically for this. The captive is managed as an independent profit centre, and acts as an additional corporate pillar.

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