Insurance and Identity

Insurance and identity represent two domains where privacy is paramount yet verification is essential. Traditional systems handle this tension through trusted intermediaries who verify private information and attest to its validity, but these intermediaries introduce centralization, privacy risks, and inefficiencies. Swarm Network enables decentralized insurance and identity systems that maintain privacy while providing cryptographic verification.

Automated Insurance Settlement

Insurance fundamentally involves verifying that claim conditions have been met and settling claims accordingly. Traditional insurance requires manual claims processing where adjusters review evidence, verify conditions, and approve payments—a process that is slow, expensive, and subject to disputes. Smart contract-based insurance can automate this process, but only if claim conditions can be verified on-chain.

Most insurance claims depend on private information. Health insurance requires verification of medical diagnoses and treatments. Property insurance requires verification of damage or loss. Business interruption insurance requires verification of revenue impacts. This private information cannot be exposed publicly without violating privacy regulations and ethical norms, yet it must be verified for insurance to function.

Swarm Network enables insurance smart contracts to settle claims automatically based on zero-knowledge proofs of private conditions. A health insurance contract can verify that a covered medical procedure was performed without accessing detailed health records. A property insurance contract can verify that damage occurred and meets policy conditions without exposing property details. A business interruption contract can verify revenue loss without revealing confidential business information.

This automation dramatically reduces claims processing time from weeks to minutes, eliminates disputes over claim validity since verification is cryptographic rather than subjective, reduces administrative costs by removing manual processing, and improves user experience by providing immediate settlement. Insurance becomes more accessible and efficient while maintaining necessary privacy protections.

Privacy-Preserving Identity

Identity systems face a fundamental tension between verification and privacy. Many applications need to verify attributes about users—age, citizenship, credentials, reputation—but users rightfully resist providing unnecessary personal information. Traditional identity systems resolve this tension poorly, either requiring excessive information disclosure or relying on trusted intermediaries who become privacy risks and centralization points.

Swarm Network enables privacy-preserving identity where users can prove specific attributes without revealing unnecessary information. A user can prove they are over 18 without revealing their exact age or birthdate. They can prove they are not from a restricted jurisdiction without revealing their specific location. They can prove they hold a professional credential without exposing their full educational history. Each verification is backed by zero-knowledge proofs that provide cryptographic certainty while minimizing information disclosure.

This approach to identity enables several important capabilities. Selective disclosure allows users to share only attributes relevant to specific applications, maintaining privacy over irrelevant information. Credential verification enables proving qualifications, certifications, or achievements without exposing credential details. Reputation portability allows users to carry verified reputation across applications without linking their identity across contexts. Compliance verification enables proving regulatory compliance without exposing personal information to every application.

Parametric Insurance

Parametric insurance pays out based on objective, measurable conditions rather than assessed damages. For example, crop insurance might pay when rainfall falls below a threshold, or flight delay insurance might pay when delays exceed a specified duration. This model enables faster settlement and reduces disputes, but it requires reliable verification of the triggering conditions.

Swarm Network enhances parametric insurance by enabling verification of complex, private conditions that go beyond simple public data. Insurance could trigger based on verified private sensor data, confidential business metrics, or other non-public information. A business interruption insurance product might trigger based on verified internal revenue data rather than waiting for public financial statements. Agricultural insurance could use verified private farm data rather than relying on regional weather averages.

The protocol’s ability to verify real-world events and private data expands the range of risks that parametric insurance can address, making this efficient insurance model applicable to more use cases. Combined with smart contract automation, this creates insurance products that are fast, transparent, and privacy-preserving.