Blockchain technology is helping rebuild trust that has long been broken between insurers and policyholders. As applied to pay-as-you-go insurance or usage-based insurance (UBI), this technology could help form a deeper connection.

UBI is a relatively new concept that interprets the number of miles you drive and adjusts your rate accordingly. In theory, this type of insurance encourages people to drive less and drive safer for, yep, you guessed it, lower rates. A win for both insurer and policyholder.

Blockchain could enhance UBI products by storing collected data from vehicle sensors in the blockchain, thus lowering costs for drivers and providing insurance companies with complex, protected consumer data.

A study by Allied Market Research suggests the UBI market could explode from 15 million to 142 million consumers in the next five or so years. So, pay-as-you-go insurance could be the answer to discovering the right amount of coverage for your lifestyle, with secure blockchain technology helping to vastly improve the process.

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