Decentralized Insurance Market By Coverage Type (Parametric Insurance, Crypto Insurance, Health Insurance, Property Insurance, Others), By Platform Type (Peer-to-Peer (P2P) Insurance, Underwriting Platforms, Others), By Ecosystem Type (Ethereum-based Insurance, Binance Smart Chain (BSC) Insurance, Multi-Chain Insurance Platforms), Global Market Size, Segmental analysis, Regional Overview, Company share analysis, Leading Company Profiles And Market Forecast, 2025 – 2035

Industry Outlook

The Decentralized Insurance market accounted for USD 1.65 Billion in 2024 and is expected to reach USD 110.1 Billion by 2035, growing at a CAGR of around 46.5% between 2025 and 2035 based on the total value insured as of October 2024.  A decentralized insurance market is a new generation of innovation within the traditional method of insurance that uses blockchain technology as its base to establish a P2P insurance ecosystem. Central institutions such as banks and insurance companies do not control insurance products in such an arrangement. The decentralized nature of the system brings in more direct interaction which eliminates many middlemen that, normally, result in cost efficiency, faster response in cases of claims processing, and full transparency. All of the members within the market will share a pool of funds, which pays for all claims. In this smart contract, one can now ensure that some conditions may be met that automatically send payouts without necessarily requiring third-party intermediaries. With this, equity and more customized coverage could be experienced since every person can fit insurance solutions for their very own needs. Decentralization also makes it even more secure and trustworthy because the transactions are carried out in the blockchain for tamper-proof and clear transactions.

Report Scope:

Market Dynamics

• Rising Transparency and Trust through Blockchain Technology

Blockchain technology is helping create a transparent and trusted decentralized insurance market through peer-to-peer transactions without any middlemen. This is what reduces the possibility of fraud, ensures more accuracy in the processing of claims, and offers a much more efficient and cost-effective system for all participants. With blockchain, smart contracts can be automatically executed in terms of the policy to increase operational transparency even further.

Blockchains also guarantee that once entered, data cannot be deleted or changed, which therefore gives consumers and insurers confidence. Studies conducted by the Centre for Alternative Finance at the University of Cambridge suggest that for the insurance business, adopting blockchain will reduce its operational cost by up to 30%. With decentralized platforms, the inclusion, transparency, and ease of access to insurance will certainly improve among the underserved or more high-risk populations.

• Lowering Costs by Removing Intermediaries in Decentralized Insurance

The decentralization of the insurance market that is supported by blockchain technology leads significantly to a reduced cost of operations since it abolishes brokers and underwriters and also middlemen-like insurance companies. The system thus provides an easy mode of a direct transaction between the insurance company and policyholders and therefore significantly wipes out overheads that were associated with administration, the commission that was usually applied, and complexities of carrying out various processes in hand.

The use of smart contracts by blockchain, which automatically executes policies and claims processing, reduces operations even more. According to the research of the European Union Blockchain Observatory and Forum, for example, insurance companies should have their administrative costs shrink by 20% due to the introduction of this technology. Such efficiency translates directly into a better deal on insurance for the consumer: more access at lower premiums. More decentralization through blockchain platforms is likely to lead to this cost-benefit in pricing, thus to greater accessibility.

• Scalability Challenges of Blockchain Technology in Handling Large Volumes of Data and Transactions

Probably one of the biggest challenges with decentralization insurance is the scalability technology of blockchain. In real life, it is observable that the more volumes, the higher the problem; the systems of blockchains cannot hold a large volume and speed or agility. Currently, transaction processing speed and other mechanisms, particularly proof-of-work consensus networks, find it difficult to handle large amounts for real-time processing that slow down processing times alongside high fees.

For instance, for the decentralized applications running on the Ethereum network, peak utilization has led to congestion in the network thereby causing the decentralized insurance platforms not to function well. European Union Blockchain Observatory and Forum points out that scalability still stands as one of the major pain points concerning the adoption of blockchain across sectors. Most networks cannot efficiently host large-scale operations. All such problems of scalability can be addressed as the size of a decentralized insurance market will grow by leaps and bounds.

• Greater Control Over Personal Data through Decentralized Storage and Encryption

Decentralized insurance markets enable the individual to take control of their data through decentralized storage and encryption technologies. Unlike traditional insurers, who collect sensitive customer information in proprietary databases, decentralized systems give ownership of personal data to the individual. It therefore reduces the risks of unauthorized access and data breaches much more than centralized networks and ensures that only authorized parties can access specific information via secure, encrypted channels.

Decentralized networks use blockchain technology to maintain transparent and immutable records of access to data, thus they will know who views their information and when. Decentralized platforms will improve data privacy and security while reducing data management costs by up to 20%, thus making insurance more accessible and trustworthy for people in regions where data privacy concerns are paramount. It is, therefore, a big opportunity for enhancing consumer confidence and access to personalized insurance products.

• Community-Driven Governance in Decentralized Insurance Platforms

Community-driven governance is the one key opportunity that comes in the decentralized insurance market. This model would have users whether policyholders or investors actively participate in decision-making processes, voting on changes to the policies, upgrading the platform, or any other key issues associated with the operation of the platform. This participative approach instills a sense of ownership and accountability that brings more trust and transparency to the insurance ecosystem. The decentralized nature of these platforms promises to allow for more inclusive decision-making as opposed to traditional insurance models whereby decisions are usually made by corporate executives or centralized entities.

The World Economic Forum projected in 2019 that with blockchain-based decentralized platforms, governance costs could be minimized by as much as 40%, and operational transparency and user satisfaction would become higher. This would result in an opportunity for creating more balanced and responsive systems of insurance, where the interests of the community are above all others in decision-making.

Industry Experts Opinion

“Decentralized finance (DeFi) and blockchain are ushering in a new era of more seamless customer experience and claims management. By facilitating inclusive insurance solutions, they can play a transformative role in empowering underserved communities,” 

• Jad Ariss, managing director of The Geneva Association.

Segment Analysis

Based on coverage type, The Decentralized Insurance market is segmented into Parametric Insurance, Crypto Insurance, Health Insurance, Property Insurance, and Others. Health Insurance is currently leading the market due to the growing demand for personalized, transparent, and efficient coverage, enabled by decentralized platforms that streamline claims and reduce costs.

Based on platform type, the Decentralized Insurance market is segmented into Peer-to-Peer (P2P) Insurance, Underwriting Platforms, Reinsurance Platforms, and Others. Peer-to-Peer (P2P) Insurance is currently leading the market due to its ability to foster trust and community-based risk-sharing, reducing operational costs and improving transparency by leveraging decentralized technologies.

Regional Analysis

North America is an important driver of the Decentralized Insurance market, given that this region is experiencing strong technological advances, robust internet penetration, and a growing interest in blockchain-based solutions. There has been a growing adoption of decentralized platforms, with this trend observed predominantly within the United States and Canada, where both insurers and customers are keen on more transparent, efficient, and cost-effective models of insurance.

The regulatory frameworks are developing and evolving to accommodate decentralized insurance innovations, thereby creating a facilitative environment for market growth. In addition, the growing demand for personalized insurance products and alternative risk management solutions such as Peer-to-Peer (P2P) insurance and parametric coverage further fuels the growth of the market. Major industry players and startups in North America are focusing on combining blockchain and smart contract technology with claims processes to streamline things and improve user experience. The region has a high rate of fintech adoption as well as growing awareness around decentralized finance (DeFi) products, which is bound to continue the growth seen in the market over the next few years.

The Asia-Pacific region is considered as an emerging trend. There exist varying economic conditions for all the countries in APAC; however, in most cases, it can be stated that high penetration and a large number of unbanked populations helped grow this region. De facto, decentralized insurance products have become fast emerging for economies such as India, Indonesia, and Vietnam and these primarily are the forms of P2P since they are very much preferred mainly because they are cost-efficient with much flexibility that coverage provides without needing any intermediaries to happen.

Currently, it is the more developed markets of Japan, South Korea, and Singapore that lead the way in blockchain and smart contracts integration in the insurance process for efficiency, fraud minimization, and lower administrative costs. A large population that is tech-savvy and rapid adoption of digital finance in the region fuels demand for innovative products like parametric and on-demand coverage, which will meet individual needs. Apart from these, progressively improving regulatory regimes surrounding Singapore and Hong Kong facilitate a better atmosphere in the context of growing decentralized solutions on the issue of insurance. Along with these, the factors considered will ready the APAC region for widespread growth within the decentralized market in terms of insurance, even if driven more by the necessity of more inclusive, highly customized insurance products and innovative technologies in that regard.

Competitive Landscape

Key players in the decentralized insurance market include Nexus Mutual, InsurAce, Etherisc, Cover Protocol, and Unslashed Finance, and how blockchain and smart contracts make these players more transparent to the users, efficient, and cost-effective. Major milestones include InsurAce entering traditional insurance and Nexus Mutual raising support for DeFi protocols. Other platforms are improving their products, like Tidal Finance and Bridge Mutual, which offer customizable coverage to the unique risks of DeFi. This is one of the indicators of considerable growth in the decentralized insurance space, and as blockchain technology matures, more insurers adopt DeFi models.

Decentralized Insurance Market, Company Shares Analysis, 2024

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Recent Developments:

• In December 2024, Marsh, the insurance broking and risk advisory business of Marsh McLennan, launched MiCAssure, a tailored insurance solution for crypto-asset service providers in the EU. This initiative aims to help businesses navigate the new MiCA regulation, which will bring significant changes to the crypto market in the region.
• In October 2023, Breach Insurance, a Boston-based global underwriter launched Crypto Shield Pro an innovative crypto custody insurance policy for institutional clients. This new product, offered through the company's Bermuda Class IIGB carrier, protects against the theft, loss, and destruction of private keys and crypto assets, a coverage previously available only to large crypto institutions.

By Coverage Type

• Parametric Insurance
• Crypto Insurance
• Health Insurance
• Property Insurance
• Others

By Platform Type

• Peer-to-Peer (P2P) Insurance
• Underwriting Platforms
• Reinsurance Platforms
• Others

By Ecosystem Type

• Ethereum-based Insurance
• Binance Smart Chain (BSC) Insurance
• Multi-Chain Insurance Platforms

By Region

North America

• U.S.
• Canada

Europe

• Germany
• France
• U.K.
• Italy
• Spain
• Netherlands
• Switzerland
• Ukraine
• Poland
• Rest of Europe

Asia Pacific

• China
• Japan
• India
• Australia
• South Korea
• Vietnam
• Thailand
• Indonesia
• Philippines
• Singapore
• Rest of Asia Pacific

Latin America

• Brazil
• Mexico
• Argentina
• Colombia
• Venezuela
• Rest of Latin America

MEA (Middle East and Africa)

• GCC
• Türkiye
• South Africa
• Nigeria
• Rest of Middle-East and Africa

List of Companies:

• Nexus Mutual
• Etherisc
• Cover Protocol
• InsurAce
• Unslashed Finance
• Acreage
• Bridge Mutual
• Yinsure
• Risk Harbor
• Tidal Finance
• Safeguard
• Kasko2go
• Lemonade Insurance
• Forte Insurance
• Nsure Network

Frequently Asked Questions (FAQs)