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Decentralized Insurance in the Era of DeFi - A Review and Research Agenda

Research Article

Authors: Anuradha Yadav; Vijaya Kittu Manda; FHA. Shibly

Journal Name: Empirical Economics Letters / Special Issue; ISSN: 1681-8997

Volume Number: Volume 23; Special Issue 1

Publication Date: January 2024

Pages: 11 to 24

Abstract: Decentralized insurance protocols powered by blockchain technology offer opportunities to address several challenges facing insurance penetration and accessibility globally. Peer-to-peer structures allow for localized risk pooling and policies tailored to specific needs. This study first identifies research dimensions and themes on the topic. It then differentiates between traditional and decentralized insurance systems, specifies the types and working models of the three decentralized insurance systems, and then sets research directions for future researchers. Regulatory frameworks are still evolving, and several other challenges are to be researched and addressed. More work is needed to address resistance from existing insurance companies, vulnerabilities like unintentional bugs, regulations and ensure adequate consumer protection when human oversight is reduced. The findings from the study help all the stakeholders connected with the insurance industry.

Keywords: "Insurance Regulations, Mutual Insurance, Blockchain, Smart Contract, Parametric Insurance"

DOI: https://doi.org/10.5281/zenodo.10892037

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