Could we rely on credit swap hedging as a substitute for insurer blockchain technology involvement?

Jyh-Horng Lin, Xuelian Li and Panpan Lin

International Review of Economics & Finance, 2022, vol. 80, issue C, 266-281

Abstract: Could we rely on credit swap hedging as a substitute for insurer blockchain technology involvement? This paper is to develop a two-stage contingent claim model to answer the question. We have three main results. First, blockchain helps the policyholder protection when blockchain involvement is relatively large-scale, helps the insurer's survival probability when blockchain involvement is relatively small-scale and helps enable greater efficiency. Second, credit swap hedging adversely affects policyholder protection and increases a higher likelihood of insurer survival. The life insurance company could regard credit swap hedging as a strategic substitute for blockchain involvement. Third, capital regulation makes the insurer more prone to blockchain involvement, thereby accelerating the transformation of the insurance system.

Keywords: Blockchain technology; Credit swap hedging; Life insurance policy; Technology efficiency (search for similar items in EconPapers)
JEL-codes: G13 G22 G33 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:80:y:2022:i:c:p:266-281

DOI: 10.1016/j.iref.2022.02.023

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