Why decentralised finance is the next best thing in insurance
With the introduction of varied new technologies and digital assets such as crypto expanding, the conventional insurance industry has taken a back seat, and decentralized finance is the next best thing when it comes to insurance.
Decentralised Finance can be defined as finance that is not tied down by any regulatory authority such as insurers, banks or any specific central financial body. Typically, decentralised finance is blockchain-based, utilizing smart contracts, and can be applied to banking, borrowing, and insurance.
The digital turn that the world is taking has paved a wider path for Decentralised Finance which can be specifically highlighted when it comes to insurance. As we know it, the insurance industry has been widely cooped up with the power of control lying with a few conglomerates. This has consumers in a dilemma as they are not in sole control of making purchasing decisions and have to follow the premium rates; the policy covers decided by the top few.
Let’s take health insurance as an example; In 2020, the standard company-provided health insurance policy totalled $7,470 a year for single coverage. On average, employers paid 83% of the premium, or $6,200 a year, and employees paid the remaining 17%, or $1,270 a year.
The DeFi space could be the answer to the problems faced by centralised finance when it comes to insurance. In this model, the financial strength and security are owned by a centralised body, the traditional insurance market, but with DeFi, the customer is truly king.
Decentralised finance’s mainstream appeal is getting stronger day by day. By changing the financial landscape positively, DeFi offers advantages to the insurance industry as well. The most obvious benefit of DeFi insurance is its accessibility compared to traditional finance. Unlike the traditional insurance industry, DeFi insurance doesn’t involve any intermediaries, significantly lowering costs. As a DeFi insurance marketplace, CoverCompared offers a wide variety of crypto and traditional insurance policies that can be purchased at affordable rates and with zero gas fees levied.
Users can also purchase flexible coverages and make their claims almost instantaneously. Without the control of a centralised body, the insurance industry promises to thrive with DeFi, and CoverCompared is proud to pave the path.
CoverCompared is the First DeFi insurance marketplace for the global crypto ecosystem. We aim to lower transactional and administrative costs of insurance policies and coverage while providing high-value, cost-effective insurance products bought using a host of cryptocurrencies.
Our platform will be connecting users with multinational insurance providers for all global insurance products such as crypto-related protection, health, life, and travel policies. The platform will include a frictionless insurance marketplace experience that incorporates next-generation blockchain technology and tokenized incentives.