Decentralized Insurance Innovations in Risk Management

Abstract

This chapter presents an in-depth exploration of the transformative potential of decentralized insurance in the realm of risk management. Decentralized insurance, or D-Insurance, leverages cutting-edge technologies such as blockchain, smart contracts, and the internet of things (IoT) to address inefficiencies and limitations within traditional insurance models. By integrating elements of microeconomics, game theory, and psychology, D-Insurance introduces a novel approach to managing and transferring risk, marking a significant paradigm shift in the industry. The chapter begins with an overview of the traditional insurance landscape, highlighting the challenges and limitations of conventional models, including affordability, accessibility, and administrative complexities. It then delves into the core concepts of decentralized insurance, emphasizing the role of blockchain technology in enhancing transparency, security, and efficiency across insurance operations.