Risk & Business

McKinsey and Company recently reported that 5-10% of all insurance claims are fraudulent. This may not seem like a lot but when you add in the costs then you realize it is a big deal. Those costs are estimated at $40 Billion a year !!  Now that gets your attention. ( This from the US and FBI as reported in Rough Notes magazine, May 2018). So the question is can technology stop the fraud?  Blockchain may just be the ticket to put a stop to the fraudsters. Blockchain is the technology that powers bitcoin. Its use as a tool is spreading into various other applications. The insurance industry is no exception. Because of its recorded and public ledger, insurance companies see it as a way to reduce the frequency and severity of bogus claims. The transparency of blockchain will give claim adjusters an easier way to validate true claims and recognize the fake ones. The technology behind blockchain is for another blog post. But you can surely bet that insurance companies will be sinking their

In the "old days" most businesses had their value wrapped up in buildings, property, vehicles, employees, etc... in other words,  tangible risks. In today's modern, technologically advanced economy,  many businesses have their value wrapped up in intangible risks. What are some of these risks? Reputational damage, loss if intellectual property, political risk, and failure to innovate and change, are just some of the intangible risks that pose a threat to success in business. There is an insurance problem also with these risks, as few options are available when it comes to coverage. In 2017 AON did a survey of Global Risk Management and found only 24% are deemed insurable, with the remaining partially insurable (25%) or uninsurable (51%). To make matters worse these type of risks are hard to identify and monetize. You cannot apply a risk management application until these two items are known. Unfortunately, few business owners will take the time and effort to find out. I