Decentralized autonomous organization as a disruptive innovation in insurance industry
Siliämaa, Rosa (2020)
2020
Kauppatieteiden maisteriohjelma - Master's Degree Programme in Business Studies
Johtamisen ja talouden tiedekunta - Faculty of Management and Business
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Hyväksymispäivämäärä
2020-03-30
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:tuni-202003022441
https://urn.fi/URN:NBN:fi:tuni-202003022441
Tiivistelmä
Blockchain technology has raised a lot of discussions within academia as well as in financial industry. The founder of Ethereum, Vitalik Buterin, was first to introduce the idea of decentralized autonomous organization (DAO), in which blockchain and smart contracts are used to form a new kind of organization. This concept is at the center of this study: could DAO disrupt the insurance industry?
DAO in this thesis is referred to as a system which utilizes transparent blockchain technology and smart contracts while being both governed and owned in a decentralized manner. This qualitative research focuses on providing a comprehensive view on DAO’s potential in insurance industry on a conceptual level. The findings combine expertise gathered from 17 informants in semi-structured interviews. This research describes the changes in insurance value chain. Additionally, several possibilities for DAO utilization in insurance industry were identified. The DAO potential is also reviewed from the perspective of a disruptive innovation, as the main research question of this study aims to understand the disruptive potential (if there is such) of DAO in insurance industry.
The main finding of this research is that DAO’s disruptive potential in insurance industry cannot be completely denied. However, there are still many open questions which stem from mindset change, regulation, governance, social construction, consumer perspective, quality of information, and technological maturity. The study did not find challenges that would have been seen as unsolvable barriers for DAO adoption. Furthermore, markets where DAO would not have any potential could not be identified. Another key finding concerns how DAO could affect insurance value chain — in essence, DAO has potential to affect all parts of the insurance value chain, depending on the chosen implementation strategy.
Based on this research, DAO seems to have manifold potential in insurance industry. Three main categories arose from the expert interviews regarding opportunities to exploit DAO in insurance: (1) peer-to-peer insurance models, (2) new markets, and, most notably, (3) existing companies could also act as DAO exploiters. Specifically, it seems that existing companies may utilize DAOs in three different ways: (1) as internal startup for certain products, (2) as an entity to which a particular part of the value chain is outsourced to, and (3) in a way, we don't know yet.
DAO in this thesis is referred to as a system which utilizes transparent blockchain technology and smart contracts while being both governed and owned in a decentralized manner. This qualitative research focuses on providing a comprehensive view on DAO’s potential in insurance industry on a conceptual level. The findings combine expertise gathered from 17 informants in semi-structured interviews. This research describes the changes in insurance value chain. Additionally, several possibilities for DAO utilization in insurance industry were identified. The DAO potential is also reviewed from the perspective of a disruptive innovation, as the main research question of this study aims to understand the disruptive potential (if there is such) of DAO in insurance industry.
The main finding of this research is that DAO’s disruptive potential in insurance industry cannot be completely denied. However, there are still many open questions which stem from mindset change, regulation, governance, social construction, consumer perspective, quality of information, and technological maturity. The study did not find challenges that would have been seen as unsolvable barriers for DAO adoption. Furthermore, markets where DAO would not have any potential could not be identified. Another key finding concerns how DAO could affect insurance value chain — in essence, DAO has potential to affect all parts of the insurance value chain, depending on the chosen implementation strategy.
Based on this research, DAO seems to have manifold potential in insurance industry. Three main categories arose from the expert interviews regarding opportunities to exploit DAO in insurance: (1) peer-to-peer insurance models, (2) new markets, and, most notably, (3) existing companies could also act as DAO exploiters. Specifically, it seems that existing companies may utilize DAOs in three different ways: (1) as internal startup for certain products, (2) as an entity to which a particular part of the value chain is outsourced to, and (3) in a way, we don't know yet.