Customers of insurance giant AXA will be among the first to benefit from ‘self executing’ contracts based on blockchain encryption technology, the company has announced. The system, called Fizzy, will pay out compensation in the event of flight delays without any action by the customer, the company claims.
The insurance contract, initially available for people travelling between Paris and the US, is filled out online and placed on a distributed ledger protected by tamper-proof blockchain encryption. This is the technology behind the Bitcoin system, which works by sharing information every transaction across a tamper-proof network, making forgery almost impossible.
According to AXA, insurance purchased on the Fizzy system is recorded in a blockchain system called Ethereum, making the contract tamper-proof and legally binding. ’This smart contract is connected to global air traffic databases, so as soon as a delay of more than two hours is observed, compensation is triggered automatically. In this way, AXA has delegated the compensation decision to an independent network.’ It describes Fizzy as a ’100% automated, 100% secure platform for parametric insurance’.
Early last year the government’s chief scientific adviser Mark Walport highlighted smart self-executing contracts as a promising outcome of breakthroughs in distributed ledger technologies. AXA says it is the first insurer to offer the technology to consumers.
Initially Fizzy-based policies are available only for direct flights between Paris Charles de Gaulle airport and the US, in either direction, the company said. ’The goal for the upcoming months is to expand the solution internationally and develop partnerships with airline companies, travel agencies and airports to further improve users’ travel experience.’