Privacy-Preserving Data Analytics in Usage-Based Insurance

This chapter introduces a privacy-preserving usage-based insurance scheme, where companies deploy smart contracts on the blockchain to realize personalized car insurance. The scheme allows public verification of data collection and processing based on decentralized trusts, thus guaranteeing transparency. At the heart of the scheme is a verifiable and privacy-preserving driving behavior evaluation protocol that employs partially homomorphic encryption and zero-knowledge proofs. With the protocol, users can interact with insurance companies via contracts, authorizing encrypted driving data access for auto premium determination based on users’ behavior. Additionally, a third-party auditor, authorized by both users and companies, can audit the encrypted data to counter fraud using a recursive inspection game, which can ensure unbiased driving data collection. We prove the scheme’s security through formal simulation-based analysis and validate its feasibility with a proof-of-concept prototype on an open-source blockchain.