French insurance firm AXA has discontinued its delayed flight insurance product, which was built and deployed on the Ethereum network.
As the second-largest financial services company by revenue in the world, AXA has made various attempts at implementing blockchain technology into its insurance products.
Named ‘Fizzy’, AXA’s blockchain-based product promised “smart insurance” with “automatic compensation”, designed to reduce claim times and hassle for passengers waiting for delayed flights.
As of today, Fizzy’s website has shut down, informing customers that the “Fizzy experience is over”. However, insurance policies that were purchased through Fizzy before its closure are still valid.
The AXA group announced Fizzy on September 13, 2017 as part of a parametric insurance scheme for flight delays.
The usual procedure to claim for late flights involves passengers phoning their insurers to report a delayed flight, which would then be corroborated with the airline before a passenger’s payout would be released.
Instead, Fizzy used flight statistics and smart contracts to track flights and automatically reimburse passengers if their flight was delayed or cancelled.
Fizzy was built on the Ethereum blockchain, providing a tamper-proof record of insurance contracts. Smart contracts were formed on the blockchain when customers bought flight delay insurance and entered their flight details.
To test Fizzy’s capabilities, AXA trialed the service with passengers flying between Paris Charles de Gaulle and the US.
The service, which paid out when flights were over two hours late, was touted as a “fresh new genre in insurance”.
The Insurance Post reports that despite its innovative nature, AXA has struggled to reach commercial targets with its first Fizzy product, claiming there isn’t sufficient market appetite for a blockchain-based consumer insurance product yet.
AXA also commented that the right distribution channels don’t yet exist for Fizzy, which points to the wider issue of adoption in the blockchain industry.
However, AXA has said that it will continue to test parametric insurance products and has gained valuable experience in building, funding, and deploying smart contracts on the Ethereum network.
Many experts have claimed that the insurance industry lends itself well to blockchain disruption. However, many may now question the relevance of blockchain for insurance purposes if a company as well-funded as AXA can’t make decentralised solutions work.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.