French insurance giant AXA SA has launched a new insurance product that utilizes the Ethereum blockchain to manage insurance contracts and to process payments.
Called “fizzy,” the new product is described by the company as a “fresh new genre in insurance” that offers compensation to policyholders whose flights are delayed by more than two hours.
The Ethereum blockchain is used both to record a smart contract copy of the insurance and also to link into global air traffic databases to match flight data to insurance policies. If the data detects a delay of more than two hours on a given flight, it then checks the insurance policy records and should it find a match, it automatically makes an insurance payment.
“What fizzy offers is parametric insurance because it uses a parameter (in this case, flight statistics) to trigger the performance of a contract,” AXA said in a statement. “The coverage is completely transparent: you know in advance how much you will be reimbursed if your flight is delayed.”
Flight delay insurance isn’t a new concept. Travel insurance often provides coverage for flight delays over two hours. But dedicated insurance simply for flight delays is a relatively rare concept — and operating it over the Ethereum blockchain is downright unique.
That the company is using the Ethereum blockchain over a standard blockchain implementation such as is used with bitcoin also makes senses from a transactional viewpoint. The Ethereum blockchain supports smart contracts and the standard blockchain does not, making the former ideal for products that involve the issue of an actual contract to provide a product or service.
For its initial launch, fizzy is being tested only with flights between Paris and the United States, with the company hoping to expand the service internationally in the coming months.