Next-Generation Insurance Networks: Architectural Insights into Decentralized Risk Management Systems
Main article
Abstract
Insurance has always been a networked activity: premiums flow inward from many policyholders, losses flow outward to the unlucky few, and an institution in the middle keeps the accounts. What is changing today is not the logic of risk pooling but the architecture through which it is executed. Distributed ledgers, programmable contracts, machine intelligence, and pervasive sensing now make it technically feasible to run the pooling, pricing, and settlement machinery of insurance on shared infrastructure rather than inside a single carrier. This paper examines that shift from an explicitly architectural point of view. It develops a five-layer reference model for decentralized insurance networks, spanning data and oracle services, consensus and ledger functions, codified risk logic, user-facing applications, and network governance. Within this model, three families of decentralized risk management systems are analyzed and contrasted: mutualized peer pools, event-triggered parametric protection networks, and token-governed risk communities. A quantitative discussion, built on synthesized industry-reported ranges and scenario analysis, explores how disintermediation and settlement automation reshape the expense structure of risk transfer, and where new cost categories, such as oracle services, code assurance, and on-chain capital, emerge. The paper then maps the principal engineering, governance, and regulatory obstacles that stand between pilot deployments and systemically relevant adoption, and closes with a research agenda that treats decentralized insurance as a problem of socio-technical system design rather than a purely cryptographic novelty.
