Blockchain for automotive: An insight towards the IPFS blockchain-based auto insurance sector

Received Aug 19, 2020 Revised Dec 30, 2020 Accepted Jan 12, 2021 The advancing technology and industrial revolution have taken the automotive industry by storm in recent times. The auto sector’s constantly growing demand has paved the way for the automobile sector to embrace new technologies and disruptive innovations. The multi-trillion dollar, complex auto insurance sector is still stuck in the regulations of the past. Most of the customers still contact the insurance company by phone to buy new policies and process existing insurance claims. The customers still face the risk of fraudulent online brokers, as policies are mostly signed and processed on papers which often require human supervision, with a risk of error. The insurance sector faces a threat of failure due to losing and misconception of policies and information. We present a decentralized IPFS and blockchain-based framework for the auto insurance sector that regulates the activities in terms of insurance claims for automobiles and automates payments. This article also discusses how blockchain technology’s features can be useful for the decentralized autonomous vehicle’s ecosystem.


INTRODUCTION
The insurance sector is a conservative, highly centralized, multi-billion dollar business that has spanned across several industries including real estate, automobile industry and healthcare. The conventional model of the auto insurance sector has been one of the successful and reliable infrastructures since the time of its initiation. However, in recent times, the conventional auto-insurance sector has started to experience the change that modern technologies have brought into the insurance sector, concerning service and product delivery [1]. With technology influencing every industry, there is an increasing threat of cybersecurity attacks, denial of service attacks, and other IT security breaches that affect the digitalized automobile insurance industry leading to detrimental financial impacts [1][2][3]. Researchers and industry experts are constantly looking to identify new and to improve existing solutions to revolutionize the conventional automotive sector by incorporating innovative technologies to improve data collection, data management, integrity, security, and overall infrastructure of the automotive insurance sector [3]. New generation systems are being designed that are combined with data processing and a substantial amount of data management capabilities to communicate with humans with the minimal intervention [4]. An estimated amount of $169 billion is planned to be allocated for implementing new technologies to improvise the automotive sector [5]. The insurance industry has a stable position and is dependable in industrialized and mature societies.
can transform the automotive insurance management process. We also discuss some of the existing literature work that highlights different technologies used in the automotive sector to improve secure data management, elevate security, and improve consumer satisfaction. The automotive sector is a multi-billion dollar business that comprises various divisions including design, development, manufacturing, sales and marketing, maintenance, and managing insurance of vehicles [5,16]. The auto-insurance sector, on the other hand, is a multiparty, multi-billion dollar business that supports the vehicle owner when the automobile gets damaged due to an accident or natural calamity, stolen, or gets damaged due to the collision with other vehicles [11,13,28], and insurance policies, rules, and regulations differ according to regional policies [28,29]. With the recent enhancement in technology and innovation in the auto sector with the booming up of electric vehicles, self-driving cars, and smart vehicles, automobile industries are looking forward to emerging technologies for effective and safe data management [30]. AIG [31], a business consulting firm, identifies the fact that the insurance industry's environment is constantly changing due to the introduction of autonomous functions and highlights the challenges involved in the ability of the industry's adoption towards rapidly changing data models. However, the report does not specify any particular technology but describes the adoption of new technologies in a generalized fashion [31]. PwC, USA emphasizes the business model in which organizations are ready in adopting new technologies and is focusing more on consumer satisfaction; and has identified the major factor that, small investments made in commercial insurance largely influence the success of any insurance sector [32].
Demir et al. [30] propose a blockchain-based vehicle insurance management system, in which vehicle insurance distributed ledger has been implemented to exchange details of insurance policies among stakeholders in the network. The authors [30] present the system which is transparent and is tamper-proof concerning-"proof-of-insurance", to all participating active nodes. The federal government of UAE and the road transport authority (RTA of Dubai) has launched a project named Dubai vehicle chain [33], which utilizes blockchain technology for vehicle lifecycle management. This system was built aiming to be a part of the Emirates blockchain strategy 2021 and Dubai blockchain strategy which is proposed to be completed by the year 2020 to handle vehicle registration, insurance management, and ownership of vehicles. On the other hand, Belgium's KBC bank [34] created a digital ecosystem to connect to all entities while purchasing a car with the influence of blockchain technology, to create a tamper-proof and trustworthy framework, thereby reducing hassles while purchasing an automobile. This will guarantee the authenticity of documents [34]. Various use cases of decentralized blockchain technology in the automobile industry are presented in Figure 1. IPFS [35], a decentralized file system could be used to hold the records of insurance companies in an accurate way, which includes maintenance, performance, and assisting drivers. Coordinating various activities including document management, propriety to access claims, verification of documents can be effectively performed with blockchain technology [33,34].
Thomson Reuters [36] reports the fact that the insurance industry is overwhelmed with the fraud problems which is costing the industry about $40 billion per annum. Various forms of auto insurance frauds have been identified by the FBI concerning insurance frauds, such as orchestrated accidents, misrepresented claims by the policyholders, falsification of identification records for claims, and many more [37][38][39]. Blockchain aims to solve the issue of identity theft and fraud [23], and several tamper-proof models were developed to improve the overall architectural security for better data management, communication within the network, credibility of data shared among the peers, and decentralized payment models for the automotive sector [23, 24,30,[40][41][42][43]. A permissioned blockchain-based system for auto-insurance claims for traversing data and entity interaction was designed [44], that showed increased reliability, based on proof-ofwork executed and is verified by actively participating entities within the network. The study proved to be effective in reducing the processing time for the transactions with minimum overhead time, as it is the commonly faced issue when a distributed ledger is employed.
Ridesharing, rental cars, and carpooling have become a new way of transportation as presented by PwC and within the next years, around 40% of vehicles across Europe and Asia are predicted to adapt to resource sharing-based and cost-efficient auto service industry [45]. As the concept of pay-as-you-go models are advancing with the increasing demand from the consumers, there increased a need to develop a secure, transparent system to support drivers during the payment of insurance premiums that use rental cars. A blockchain-based solution for management and analysis of data and micro-insurance records was presented by Vo et al. [46] that regulates the pay-as-you-go insurance premium models and makes the transactions very transparent and notifies all the parties (including the insurance company, drivers, associated financial organization) about various events within the network. This model will equally beneficial for all parties involved concerning data management, data security, intra-network communication, and insurance premium handling. On the other hand, Chekriy et al. [47] reiterate that the deployment of blockchain technology in the auto insurance sector would reduce the occurrence of the error in assessing the damage of vehicles, premium calculation, and settlement of claims and thereby results in reduced overall costs for the insurance sector. Chekriy  [47] also emphasize that the IBM Watson IoT platform could be integrated with blockchain to improve the engagement of entities within the network that aims to result in better estimation of damage in case of an accident, and beneficial settlement for the insured vehicle.

Blockchain use cases for vehicular ecosystem
In this section, we list out various blockchain-based use cases for the vehicle ecosystem. We give an insight into several practical use cases ranging from financing and insurance applications, verifying ownership, manufacturing and supply chain management, new ownership models, and auto manufacturing. Table 1 presents the most predominant sectors in the auto sector where blockchain can play a major role in transforming the conventional auto sector.

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A blockchain-IPFS based solution is proposed in the next section to ensure secure, transparent, and tamper-proof vehicle insurance transactions. Further, this framework aims to improve quality and productivity via automation, security, control, and traceability of insurance documents; Improved transparency among stakeholders gives a comprehensive view of data and transaction; Reinventing services through decentralized digital identities.

PROPOSED SYSTEM-IPFS BLOCKCHAIN-BASED SOLUTION FOR THE VEHICLE INSURANCE SECTOR
In this section, we propose a blockchain-powered solution that helps in regulating the vehicle insurance sector's functioning, claims management, and payment regulation and claim approvals. Figure 2 shows the proposed blockchain-based model for improving the existing vehicle insurance sector and automatically channelizing vehicle insurance claims. As shown in Figure 2, the actors/entities in the system are policyholder (customer), vehicle insurance company, garage representative, and Police department. There is an Ethereum powered smart contract which controls and regulates all the entities involved in the insurance claim process. Initially, upon an accident or theft, the customer reports the incident and files the FIR. This is logged as an event in the smart contract. Following which the police department investigates and endorses the FIR registered by the consumer or insured in this case. As the next step, it is clear from Figure 2 that the customer completed and submits the claim form. The smart contract sends out an event to notify all the active participants about every function executed within the contract.
The customer then stores the claim form in the interplanetary file systems (IPFS), the decentralized file system that supports the smart contract for file storage purposes. A smart contract is not efficient enough to store large documents; hence the reports or documents are stored on the IPFS file system and IPFShash of the document or claims form in this case is stored on the smart contract. In case, if the report/document is modified or corrupted by a malicious user, the hash changes showing that the file was changed and the transaction gets aborted. The insurance company appoints a garage surveyor to inspect the vehicle and to validate the claim submitted by the customer. Once the garage surveyor validates the claims, the payment process is carried out and is paid to incur the expenses caused due to the accident. If the garage personnel deny the amount of claim submitted, then the contract denies payment for the claim and sends out an event notifying the concerned customer. Figure 3 shows the sequence diagram explaining various functions and events between the participating entities. Using blockchain and smart contracts regulates and automates the communication between multiple parties in a network, and eliminates the need for middlemen to settle disputes in insurance claims. Upon raising the service request, the smart contract executed will guarantee the enforcement of predefined rules such that all the authorized stakeholders can check the outcome of a transaction. The proposed model aims to optimize the performance of the auto-insurance industry, making the transactions transparent and tamper-proof, and effective in terms of dispute settlement among parties.

Implementation
In this section, we have provided some of the important code snippets, and algorithms of our proposed solution, explaining the working principle of our smart contract. Algorithms 1 and 2 explain the insurance claim working principle on a blockchain platform powered by Ethereum smart contracts with IPFS decentralized file storage facility. Execute the inspectVehiche() function 3.
Notify with "inspection Successfully completed message and damage report stored in IPFS" 5.
Revert contact state and throw an error. Execute the validateClaim() function 4.

Algorithm 2: Insurance claim validation by Insurer
Broadcast Event ClaimValidationSuccessful 5.
Revert contract state and throw an error.

end
Algorithm 1 shows the smart code pseudo-code for the inspection carried out by the garage surveyor, in which the Ethereum addresses of the customer, garage member, and service token number is taken as input, as provided by the Insurance company. Upon receiving the assigned service token number, the garage member inspects the vehicle and reports the damage, which is stored on IPFS and notifies with the event "InspectionCompletedAndReported". The IPFShash is stored on the smart contract and the servicecount is incremented by 1. Following the inspection, the vehicle insurer executes the validateClaim() function. If the claim matches the pre-agreed amount of insurance, the contract notifies the event ClaimValidationSuccessful and increments the successful claims by 1, else denyClaim() function are executed and all participants are notified with the message ClaimValidationDenied. All the transactions are recorded in the smart contract and are tamper-proof, preventing any fraudulent transaction or fake insurance claims. Once the claim is validated by the insurer successfully, the approvePayment()function is executed and the smart contract sends an event notification-PaymentApproved to all the active entities stating that the payment is approved which is presented in algorithm 3.

Algorithm 3: Payment approval
Input: EthereumAddress(EA) of the Insurer, EthereumAddress(EA) of the Customer 1. Check if the claim submitted by customer is successful 2. If ClaimSuccess then 3.
Revert contact state and throw an error message.

end
The smart contract was implemented on the Remix IDE-Ethereum platform and was coded in Solidity programming language. The fully functional code is available at https://github.com/NisharaNizamuddin/Auto_Insurance_BC. Figure 4 shows the constructor of the auto insurance smart contract. As shown in Figure 4, the customer creates the smart contract with the initial state of the smart contract being NotReady and the IPFShash of the report is "QmXgm5QVTy8pRtKrTPmoWPGXNesehCpP4jjFMTpvGamc1p", which remains to be a proof for the FIR registered for the damage caused. Other parameters such as numberOfRequestsByCustomer, numberOfApprovalsByAutoInsurer, numberOfValidationByGaragemember are also declared and initialised in the smart contract's constructor. The insurance amount is pre-determined, agreed, and is stored in the contract between the parties. The code snippet of the mapping to record the list of approvals and validation by the garage supervisor and insurance company are presented. Figure 5 shows mapping where every Ethereum address points to the address of the approved list of customers by the insurers and the garage supervisor's approval for payment processing. The Ethereum addresses of various entities used for testing of contract are: policedept, insurance_company, customer, garage_supervisor: 0x14723A09ACff6D2A60DcdF7aA4AFf308FDDC160C, 0x4B0897b0513fdC7C541B6d9D7E929C4e5364D2dB,0xCA35b7d915458EF540aDe6068dFe2F44E8fa733c, 0x583031D1113aD414F02576BD6afaBfb302140225 Respectively, Once the customer creates the contract and reports the event to the police department, the police personnel inspect and approve FIR. Next, Figure 6 illustrates the submitClaim() function, which is executed by the customer to approve the claims from the vehicle insurer. At this stage, the state of the smart contract is Inspected. The state of the contract changes to WaitingForClaimsApproval, and the insurer's state changes to SubmittedForApproval. The event ClaimSubmitted is triggered. The customer waits for approval from the insurer who allocates the damage inspection task to a garage surveyor. The numberOfRequestsByCustomer is incremented by 1 every time the customer submits an insurance claim request. Figures 6 and 7 shows the output logs for the function submitClaim() and event ClaimSubmitted broadcasted to the active entities in the contract. Next, the Remix IDE console output for the appointment of the garage surveyor is shown in Figure 8. The function appointSurveyor() is executed by the insurance company. A modifier OnlyVehicleInsurer is used to restrict the access for the authorized entity alone, thereby preventing any malicious transaction. Further, the function takes the address of the customer claiming insurance as an input variable and sends a notification in the form of an event SurveyorAppointed broadcasting the message "Garage surveyor appointed to inspect damage" as shown in Figure 8. SurveyorAppointed, and if the IPFShash of the insurance contract matches with the claim submitted by the consumer, and Insurer state changes to InspectionCompleted_ClaimSuccess and the numberOfValidationByGaragemember is increased by 1 and the contract broadcasts the event ClaimValidatedAndApproved as demonstrated in Figure 9. In case of a failed validation, the contract throws an error saying that the claim denied. Finally, the logs showing payment approval followed by a successful inspection of the Vehicle is presented in Figure 10. Vehicle insurer executes approvePayment() where the contract state is GarageInspectionCompletedSuccess. Upon successful execution of function approvePayment(), the contract state changes to ProcessPayment, and the event PaymentApproved is notified with the message "insurance amount paid to customer". The smart contract ensures automatic payments, settlement of insurance claims, and transparent dispute settlements if any. This proposed framework and algorithms will prove to be effective in terms of automatic insurance claim handling and dispute settlement between various stakeholders within the claim department as every transaction is recorded and is tamper-proof. Any kind of false amendment made to the surveyor's report or the initial agreement will modify the IPFShash which will in turn notify all the members that a fraudulent transaction has occurred and the smart contract reverts to its previous state. All transactions are recorded in the blockchain only when all the participating miner nodes agree with the outcome of it. This framework aims to improve the conventional auto-insurance sector's functioning by improving the security of transactions, safeguarding the identity of stakeholders, maintaining complete transparency, and facilitating automatic insurance claim/payment settlements.

DISCUSSION
The primary purpose of this study was to examine how blockchain technology and IPFS, when implemented, can benefit the auto-insurance sector. Earlier research suggests [48,50,55] that blockchain can play a major role in auto-insurance document verification, document and identity management, and transfer of vehicle ownership. Further, other research studies clearly state the importance and role of decentralized blockchain technology [17,21,73]. Our results revealed that blockchain combined with the IPFS framework enhances the consumers' trust in the auto-insurance sector, improves the transparency of insurance transactions, and effective data and identity management of the insurance industry as a whole. It is evident that by using blockchain technology and IPFS framework all the documents and transactions are tamperproof, verifiable, and works on consensus protocol. In the longer run, blockchain technology can be combined with emerging technologies like artificial intelligence, edge computing, and machine learning. Stanciu [53] came up with a "blockchain-based distributed control systems for edge computing" which shows that blockchain juxtaposed with other emerging techniques and technologies has a promising future. The outcome of our research shows that any malicious attempt to change the records will result in a change in the IPFS hash which will notify all the miners about the malicious activity. If the miners don't approve the activity, then the transaction gets aborted and the block is not added to the blockchain.
Blockchain seems to be a disruptive and innovative technology that has gained importance across many platforms and many industries including healthcare, finance, robotics, food engineering have started designing platforms and modules for utilizing the benefits of this decentralized technology. It is certain to dominate the auto insurance sector with its disruptive properties. However, there are several implementation challenges to be examined before a large scale industry adoption is made possible. Various challenges to be tackled in implementing blockchain for the auto sector and social-autonomous vehicles in real-time are presented in this section. It is certain to dominate the auto insurance sector with its disruptive properties.

Limitations
However, there are several implementation challenges to be examined before a large-scale industry adoption is made possible [74]. Potential concerns associated with implementing blockchain technology for the auto-industry sector are presented in Figure 11. Various other challenges to be tackled in implementing blockchain for the auto sector and social-autonomous vehicles in real-time are presented in this section.  Scalability: Blockchain suffers from scalability issues; with the increasing number of transactions the systems slow down and eventually become unsustainable [73,75]. A transport ecosystem involves a large number of entities and transactions, and scalability remains a major issue.  Lack of government standards: Government agencies are still analyzing the potential implications and benefits of blockchain technology.  Regulations: Blockchain is still an emerging technology that makes it challenging to establish definite regulations and laws. In a blockchain network, there are multiple parties involved, located across the world, and every country and government has got different rules for various categories such as -individual privacy, legal procedures, liabilities, legal titles, and ownerships [75][76][77]. Blockchain, on the other hand, consumes a considerable amount of energy, as the miners use the computing power when adding new blocks of transaction data to the blockchain. New regulations have been proposed by world nations to check on the carbon emission and energy consumption which impacts the environment [78,79].  Usability issues: Blockchain technology is in its initial development stages, and most of the platforms face associated with blockchain face infrastructural issues [73]. The current tools used for development, testing, and evaluating the performance of methods have dependencies on third-party tools and technologies which raises questions on the decentralized features [73,74].  Security concerns: Smart contracts itself suffer from one of the major attacks-the DAO attack [80] which forced the developers and founders of Ethereum and the Bitcoin industry to reshape the security and robustness of smart contracts. We have presented a decentralized blockchain-IPFS based framework in this paper. We aimed to present an elementary framework that can be used as a use case for the auto insurance sector using emerging blockchain technology. A similar model can be deployed for developing a transparent, secure, and tamperproof model for handling transactions in multiparty environments like the land registry, supply chain, logistics, healthcare, and education, to name a few.

CONCLUSION
The automobile industry has embraced technological advances and major changes in terms of data management, collaboration, and information exchange since the time of the Industrial revolution. Blockchain technology has started to influence various business sectors including the government entities and corporate giants with its visionary properties. This article provides an insight into how blockchain technology can be incorporated to enhance the vehicular ecosystem and automotive sector. We presented an insight into blockchain-based applications and use cases for the transport ecosystem for data management, connected vehicle security, and infrastructure for the automobile industry. We proposed an Ethereum platform poweredblockchain-based decentralized auto-insurance framework that regulates the activities of the insurance sector, claims process in case of an accident or theft, and automates insurance payments. We emphasized the usage of IPFS for records management (claims record in this case) to store the record on a decentralized ledger, automate insurance payment claims, and avoid any error while handling the claims. In this article, we emphasize how blockchain-IPFS can be used together to augment overall institutional operations by improving the security and transparency of transactions. A similar framework can be used for improving transparency of transactions across various industries including land registry, supply chain industry, and logistics that aim to guide policymakers and government organizations. Further, as a part of future research work, we aim to implement the auto-insurance smart contract on the Hyperledger platform to facilitate and promote decentralized ledger technology as a part of smart city innovative investments.