# Blockchain and Smart Contracts for Insurance: Is the Technology Nature Enough?
## 4 A SWOT Analysis
that technology is not fully mature yet (and bugs frequently appear), value of cryptocurrencies show huge fluctuations. Another weakness is related to the fact that development tools are still in an early stage, and standards for developing blockchain-based applications have not been defined yet. Finally, it is worth remarking that, in some cases, blockchain would not be the most suitable technology to use, as existing, well-mastered alternatives would enable the achievement of comparable results [64]. Opportunities are mainly related to whether the market would embrace the technology or not. At the present time, interacting with the blockchain requires some technical skills (e.g., mastering the concept of blocks, installing a wallet, etc.). Several efforts are currently carried out in order to reduce/hide the complexity behind the technology (e.g., the development of browser plugins which let users easily inspect the ledger [65], the creation of user-friendly wallets [66], etc.). Should the above initiatives be successful, companies providing blockchain-based applications and services (and, in the insurance market, companies offering blockchain-based policies) could have a competitive advantage. This advantage would become larger in case of an increasing diffusion of IoT, as smart contracts could be coded to autonomously make decisions based on data acquired by sensors [39; 40; 41]. Another opportunity is related to the possibility to address new markets and create new types of services, mainly by leveraging DAOs and low transactions fees. Blockchain could be successfully used to support the sharing economy, from car and house sharing [67] to disk storage rental [68] (and, in an insurance scenario, to support micro, on-demand and peer-to-peer insurances). Finally, should a high number of actors write data on the blockchain, innumerable new applications could appear. As a matter of example, a person's previous medical history could be easily retrieved by doctors in case of urgency; blockchain could become a repository of medical data which could be used by research scientists; blockchain-based supply chains could be more efficient as data could be shared nearly instantaneously among heterogeneous involved actors; in an insurance scenario, data could be used for frauds prevention, policies personalization, etc. Nonetheless, the type and impact of these applications would be a function of the amount and quality of information recorded. Threats are linked to different external causes. First of all, there is still a risk that the market distrusts this technology, perceiving it as unsecure or unreliable, due to bugs, cryptocurrencies volatility, etc. Other actors could think that it is too complicated, and the adoption rate on a worldwide basis could be low. As a countermeasure, such actors should receive a suitable training to be made aware of the advantages of this technology. Alternatively, efforts could be carried out to hide the underlying complexity. Particular attention should be paid to legal regulations, which could threaten the adoption of blockchain. For instance, the regulation of the use and jurisdiction of smart contracts is still under debate. To make some examples, there could be situations in which the outcome of a smart contract would not be considered as legal by a court under existing laws (e.g., a smart contract regulating transactions of illegal goods) [69]. Similarly, there could be situations where hackers exploit smart contracts bugs to steal money. Some governments could consider blockchain and smart contracts too \"dangerous\", thus resulting in a limitation of the adoption on a larger scale. Concerning practical aspects, blockchain-based applications are a medium- to long-term investment, and they could not be suited for integration in all the existing processes. In fact, as previously discussed for the insurance sector, some claims would still need to be manually processed, as not all the damages could be evaluated by sensors.