The Role of Blockchain Technology in Financial Engineering
This research work is to study and list out the processes and operational areas where Blockchain Technology (BCT) is playing a greater role as a tool in the process of financial engineering (FE) in the insurance business. We studied the use of BCT as one
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Abstract This research work is to study and list out the processes and operational areas where Blockchain Technology (BCT) is playing a greater role as a tool in the process of financial engineering (FE) in the insurance business. We studied the use of BCT as one of the InsurTech tools in the design and development of financially engineered insurance products. Here, the development of insurance products covers the design of new and innovative insurance policy models, its attractive features as per the needs and requirements of concerned target customers. Insurance processes cover the management and administration of insurance business i.e., marketing, sales and distribution, the underwriting process and claims management, etc. Financial Engineering is a process of creating a new and innovative insurance model by merging existing policy models OR creating a new and innovative insurance model. FE uses the tools and techniques of Statistics, Financial Mathematics, Econometrics, ICTs which includes, FinTech tools, InsurTech tools like Blockchain Technology, Artificial Intelligence, etc. In this research work, we used descriptive cum explorative research methodology. We have studied the role of BCT as an effective tool in the financial engineering process of the insurance business.
Keywords Blockchain Technology Financial Engineering InsurTech Insurance business Insurance policies
FinTech
V. Chakravaram (&) S. Ratnakaram Jindal Global Business School, OP Jindal Global University, Sonipat, Haryana, India e-mail: [email protected] S. Ratnakaram e-mail: [email protected] E. Agasha Mekerere University Business School, Kampala, Uganda e-mail: [email protected] N. S. Vihari BITS Pilani, Dubai Campus, Dubai, United Arab Emirates e-mail: [email protected] © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2021 A. Kumar and S. Mozar (eds.), ICCCE 2020, Lecture Notes in Electrical Engineering 698, https://doi.org/10.1007/978-981-15-7961-5_72
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1 Introduction One of the fastest-growing sector and industry in the Indian Economy is the Insurance sector. This sector broadly can show in two divisions. One is Life Insurance Sector and the second one is the General Insurance Sector. Total 60 licensed insurance companies are playing a major role and serving the people in India. 24 companies are providing their insurance services in the life insurance sector and 34 companies are providing services in the general insurance sector and the balance two are in reinsurance business and serving to the above listed 58 companies. All these companies are regulating by Insurance Regulatory Development Authority of India (IRDAI) an agency of Government of India. After the Banking Sector, Insurance is the largest sector in the Indian economy which is playing a major role in terms of offering innovative financial and insurance services to the Indian insurance customers. More than 95% of these registered companies are
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