A Transparent and Privacy-Aware Approach Using Smart Contracts for Car Insurance Reward Programs

Car insurance companies worldwide have launched reward programs that provide benefits (e.g., cash-back) to good drivers. However, two issues may arise from these programs. First, drivers cannot easily verify whether their insurer is properly following the program rules upon computing their rewards. The second issue is that privacy can be violated when sensing data is collected from policyholders’ cars to identify whether they are good drivers. This paper proposes a smart contract-based solution that trades off user privacy for reward transparency. A smart contract computes rewards based on sensing data policyholders provide to the Ethereum blockchain. To preserve privacy, a policyholder can (i) select what sensing data is sent to the blockchain, (ii) use distinct pseudonyms to hide his or her real identity, (iii) choose what accuracy sensing data has, and (iv) verify whether his or her sensing data allows him or her to remain indistinguishable from other drivers whose data has been already disclosed in the blockchain.