AXA Launches Blockchain Based Flight Delay Insurance Product Fizzy
Insurance giant AXA has launched an Ethereum blockchain based insurance product that pays when a flight is delayed by more than two hours. Most importantly, the process of verifying the delay is done automatically through smart contracts embedded in the insurance product named Fizzy.
The insurance company, with more than a $1 trillion dollar in assets and $6 billion in annual revenue, however, processes the payment manually as the smart contracts are not programmed to handle cryptocurrencies due to legal, accounting, and regulatory reasons.
Based on the flight data provided by third parties, Fizzy’s smart contract automatically decides the outcome of an insurance contract based on a simple set of ‘if/then’ rules. AXA explained that the Fizzy blockchain establishes a flight delay or any other event that allows compensation for the customer, unlike traditional insurance product where the onus of proving a flight delay is on the customer,. This relieves the customer of possible anxiety and trouble in providing the documents to prove the delay.
In most cases, several hours can be saved, which would be otherwise spent in verification of the claim. A customer is also relieved of all kinds of paper works to make a claim for the delay. As mentioned earlier, the insurance premium and compensation is made in fiat currency.
Fizzy is a blockchain based totally automated, parametric flight delay insurance system. Interest clients can go visit AXA website, enter flight details and get a quote. A policy subscriber will receive compensation directly in the bank account, if the flight’s landing is delayed by at least two hours.
Whenever a user subscribes to a policy, the Fizzy product performs two main functions
- Add new insurance
- Update flight status
Additionally, there is also a function that will call for manual insurance resolution. This will get triggered during out-of routine events, say for example, when a user cancels the policy before flight.
A flight delay recorded on the basis of data input from a third party provider will make the smart contract generate an event, resulting in an insurance compensation. The Fizzy blockchain has the capability to process Ether payment automatically. The day cryptocurrencies are officially recognized by governments, the insurance purchase and compensation will become totally automatic.