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

Nada Mallah Boustani () and Magnaghi Elisabetta
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Nada Mallah Boustani: Faculty of Business & Management, Saint Joseph University, Social Science Campus, Beirut 1104-2020, Lebanon
Magnaghi Elisabetta: Faculty of Management, Economy and Sciences, Universite Catholique de Lille, 41 Rue Du Port Bureau, RZ 405 Lille, France

FinTech, 2022, vol. 1, issue 4, 1-16

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.

Keywords: blockchain; business interruption; smart contracts; insurance; DeFi (search for similar items in EconPapers)
JEL-codes: C6 F3 G O3 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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