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Smart Insurance Contracts Shielding Pandemic Business Disruption in Developing Countries and Blockchain Solution

Author

Listed:
  • Nada Mallah Boustani

    (USJ - Université Saint-Joseph de Beyrouth, LEFMI - Laboratoire d’Économie, Finance, Management et Innovation - UR UPJV 4286 - UPJV - Université de Picardie Jules Verne)

  • Elisabetta Magnaghi

    (LEM - Lille économie management - UMR 9221 - UA - Université d'Artois - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique)

Abstract

As the Fourth Industrial Revolution gains momentum and involves a plethora of disruptive technology concepts, such as blockchain, they have infiltrated economies that have only experienced a small portion of their scope, consequences, and applications in their different branches. This research aims to examine the potential uses of blockchain technology within the framework of smart contracts in the insurance sector, notably in the event of a pandemic that results in business interruption. Businesses hardly ever take business interruption insurance into account, particularly in a country similar to Lebanon, where natural disasters and pandemics are scarce. Due to the complexity of the task and the numerous requirements for trust in terms of risk consistency, traditional insurance companies are not interested in offering these kinds of insurance contracts. In this current study, a quantitative study was conducted over 213 businesses in various fields and revealed acceptance and socio-demographic differences in the activity sectors of this potentially ground-breaking solution for a developing country that is undergoing a sanitary and economic crisis. As a result, smart contracts and decentralized finance (DeFi) were proposed in the current research as potential solutions to overcome the Lebanese currency devaluation and high insurance costs.

Suggested Citation

  • Nada Mallah Boustani & Elisabetta Magnaghi, 2022. "Smart Insurance Contracts Shielding Pandemic Business Disruption in Developing Countries and Blockchain Solution," Post-Print hal-04077735, HAL.
    • Handle: RePEc:hal:journl:hal-04077735
    DOI: 10.3390/fintech1040022
    Note: View the original document on HAL open archive server: https://hal.science/hal-04077735v1
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    References listed on IDEAS

    as
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    4. Valentina Gatteschi & Fabrizio Lamberti & Claudio Demartini & Chiara Pranteda & Víctor Santamaría, 2018. "Blockchain and Smart Contracts for Insurance: Is the Technology Mature Enough?," Future Internet, MDPI, vol. 10(2), pages 1-16, February.
    5. Paolo Tasca, 2019. "Insurance Under the Blockchain Paradigm," Springer Books, in: Horst Treiblmaier & Roman Beck (ed.), Business Transformation through Blockchain, chapter 9, pages 273-285, Springer.
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    Cited by:

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