# Blockchain and Smart Contracts for Insurance: Is the Technology Nature Enough?
## 1 Introduction  
A blockchain is a distributed ledger maintained by network nodes, recording transactions executed between nodes (i.e., messages sent from one node to another). Information inserted in the blockchain is public, and cannot be modified or erased [1]. Smart contracts are self-executing contracts (generally saved on a blockchain) whose terms are directly written into lines of code [2]. Recently, blockchain and its relations with smart contracts has received increasing attention from media, which started to address it as \"The next big thing\" [3], \"The new black\", \"The philosopher's stone\" [4] or \"The new Graal\" [5]. In [6], blockchain has been compared to inventions such as the steam or combustion engine, since it is potentially able to bring benefits to a variety of everyday activities and business processes. According to Gartner's hype cycle, blockchain is at the peak of inflated expectations, where the enthusiasm is at the highest level possible [7]. Nonetheless, concerns started to be expressed as well about a massive adoption of blockchain [5; 8; 9; 10; 11; 12; 13]. The common denominator in the above concerns is that technology is considered, on the one hand, to be not fully mature yet [5; 9] and, on the other hand, to be overhyped [8], since its application often produces outcomes that could be achieved using well-mastered alternatives [10]. The risk is that one is so much in love with this technology that it becomes impossible for one to objectively judge its true benefits. As stressed by [PERSON], a technical architect of the Bank of England, \"[With blockchain] the focus as always should be on fulfilling user needs, not on implementing technologies simply because they are clever or interesting.\" [11]. The insurance sector, as with many others, started to investigate the application of blockchain technology through considerable investments from both big and small companies [14; 15], investigations from consultancy firms [4; 16; 17], and the creation, in 2016, of the B3i, the first blockchain-centered insurance consortium [18]. The hype cycle for the insurance sector [19], however, depicts blockchain technology at the beginning of the curve connecting the technology trigger phase with the peak of inflated expectation, meaning that this technology has not been fully explored yet in this particular sector. Hence, the questions that insurance companies are asking themselves right now are \"Are there clear use cases exploiting blockchain technology and smart contracts in the insurance sector?\", \"In case we want to adopt a blockchain, what is the most suitable blockchain architecture for our needs?\" and, more in general, \"Is blockchain technology mature enough for insurance?\". It has been estimated that they will need to wait about 3 to 5 years to see whether they made the right choice today by deciding to invest or not in blockchain for their business [20]. The objective of this paper is to help companies operating in the insurance sector to answer the above questions by providing an overview of blockchain- (and smart contracts-) based use cases in such specific sector, and by highlighting strengths, weaknesses, opportunities and threats for this technology. The authors decided to focus on insurance because, in this sector, blockchain technology could have a relevant impact on a variety of processes and application scenarios. Notwithstanding, it is worth observing that, despite the focus on the particular domain the authors are operating into, many of the examples provided and considerations made throughout the paper could be helpful for a number of other companies, not necessarily from the financial domain. In fact, the aim is to stimulate reflections and discussions on this topic, leaving to the reader the final judgment on the actual benefits that could come from the adoption of the considered technology in a specific scenario. The paper is organized as follows: Section 2 provides an overview of the blockchain technology, by presenting its key concepts.