Analysis of the Current Status of the Insurance Industry from the Perspective of Implementing Blockchain Technology in Life Insurance Development

Purpose: This research explores the transformative potential of blockchain technology in revolutionizing the life insurance industry, with a focus on enhancing transparency, reducing operational costs, and optimizing insurance processes. The study seeks to evaluate blockchain’s capacity to strengthen trust between policyholders and insurers, streamline policy issuance, claims management, and reduce reliance on traditional intermediaries through smart contracts. Additionally, it aims to identify operational, legal, and infrastructural barriers to blockchain adoption in Iran’s insurance sector. By proposing practical solutions, the research endeavors to facilitate the development of strategic policies, regulatory reforms, and alignment of existing infrastructures with blockchain requirements. The study also promotes innovation in the insurance industry by leveraging emerging technologies to enhance competitiveness and sustainability in domestic and international markets. Furthermore, it emphasizes the creation of decentralized platforms for life insurance sales and the improvement of customer experience through advanced digital services.

Method: Conducted as applied research; this study employs an analytical-comparative approach. Data were collected through field methods, including surveys and interviews with 24 insurance industry experts selected via purposive, non-random sampling. The surveys were designed to assess the necessary infrastructure, implementation prerequisites, and the perceived need for blockchain technology in insurance companies. Data analysis involved examining respondents’ demographic characteristics, such as gender, education level, professional experience, and organizational role, alongside their responses to specialized questions. To enrich the analysis, prior studies, research reports, and global experiences with blockchain applications in the insurance sector were consulted, enabling comparison with international trends and validation of findings.

Findings: The research reveals that blockchain technology, with its hallmark features of transparency, robust security, and decentralized architecture, holds substantial potential to fundamentally transform the life insurance industry. Smart contracts enable the automation of processes such as policy issuance, risk assessment, claims management, secure data storage, and expedited claims payments, significantly reducing operational costs. Survey responses indicate that 92% of Iranian insurance companies have yet to undertake meaningful steps toward blockchain implementation, yet the vast majority of respondents emphasize a critical need for its adoption in life insurance development, particularly for unit-linked and annuity products. Key applications include fraud prevention and detection, more precise risk assessment, fairer pricing, secure data management, and faster claims processing. However, adoption faces challenges such as inadequate technical infrastructure, legal gaps, organizational resistance, a shortage of specialized personnel, and insufficient awareness of implementation risks. Collaboration with entities like the Ministry of Health, judiciary, Ministry of Communications, healthcare institutions, and customer credit agencies for data exchange was identified as a vital requirement. Respondents also highlighted smartphones, machine learning, artificial intelligence, big data, and blockchain as pivotal technologies driving insurance industry transformation, reflecting a broader shift toward digitalization and adoption of innovative technologies including blockchainو to enhance services and customer satisfaction.

Conclusion: The study underscores that blockchain technology, is a powerful catalyst for advancing digital transformation in the life insurance sector. Its benefits, including heightened transparency, enhanced data security, cost reduction, and accelerated insurance processes, position it as a strategic asset for insurance companies. Nevertheless, realizing this potential requires overcoming challenges such as regulatory reform, digital infrastructure development, workforce training, and shifting managerial perspectives. It is recommended that insurance companies pursue pilot projects, strengthen collaboration with regulatory authorities, leverage global best practices, and partner with technology startups to facilitate blockchain adoption. Establishing clear legal frameworks, fostering inter-organizational collaboration networks, promoting a culture of innovation, and investing in IT infrastructure are essential steps to fully harness blockchain’s capabilities. Ultimately, this research emphasizes the necessity of strategic planning and coordination among industry stakeholders to enhance the sustainability, competitiveness, and responsiveness to evolving customer needs in Iran’s life insurance sector through blockchain technology.