How is Blockchain Redefining the Insurance Industry?
Blockchain is continuously revolutionizing business transactions. It works on the distributed ledger technology wherein each transaction is added to a block and cryptographically coded and settled in a real-time basis. The real-world use-cases of blockchain technology span various industries such as supply chain, finance, transportation, agriculture, judiciary, healthcare, media, education, and more. All of the blockchain applications have great potential, but in the blog, we will understand how blockchain is reshaping the insurance industry.
Why Blockchain for Insurance Industry?
Blockchain offers various benefits to the insurance industry, including the following:
1. Automates underwriting– Underwriting is an accepted liability taken by the underwriter at the time of the creation of an insurance contract. Blockchain solutions at enterprise scale simplify the operational process for insurance payments. For instance, an insured suffers a loss due to the cancelation of flight. Instead of performing all the functions manually, a smart contract can be integrated with the open flight database to ascertain the reality of the situation. In such a manner not only timely decisions will be taken but a lot of costs will also be saved in this process.
2. Accelerates claims settlement process- In general, while settling an insurance claim, a lot of parameters need to be checked before signing it as eligible. Even in this aspect, blockchain solutions can assist you to ease your claim process.
B3i is a blockchain insurance consortium formed by the association of many companies such as AIG, Allianz, Swiss Re, and others. They have launched a new product for the real estate sector that will deal with the insurance issues coming from the naturally occurring disasters. The process will completely be automated and will collect evidence and evaluate the proximity of loss. Furthermore, in the future, the insured party will also be able to receive claim payments in cryptocurrency.
3. Reduces fraud and abuse- It has been reported that in the USA alone, over $40 million has been claimed on the basis of false presentation of cases in healthcare insurance frauds. It can be said that there is a dire need to implement enterprise blockchain solutions to recover the bad state of the insurance sector.
Indeed, companies such as Block Verify have started using blockchain solutions to detect frauds and make the insurance industry more reliable.
How can insurance companies benefit from blockchain integration?
Blockchain technology widens the horizons of the existing insurance industry. The distributed ledger technology plays a great role in automating the operations right from the time of issuing a contract till the payment of the claim, in case of any uncertainty. It brings in speed and decreases the amount of manpower required to process the system. Thus, it is a very cost-effective technology that reduces the possibility of any mistake.
With blockchain technology, many other newer technologies can also be integrated such as IoT, data analytics, and big data. Tokio Marine, a Malaysia-based insurance company keeps a check on its cargo movement with the help of blockchain technology. With this, they are able to report the loss of cargo right in time to the concerned party and thus manage their risks well. Other than this, Maersk, a shipping company makes use of blockchain technology to detect any casualties or probabilities of any harm. Therefore, in this manner, they can easily get claims from the insurance sector.
Blockchain technology holds great potential to bring positive results in the insurance industry. Duplication of work, increased spending, fighting frauds, all this can be managed with a single distributed ledger technology.
If you are willing to integrate blockchain technology into your own industry, Antier can help. We are one of the leading Fintech blockchain solution providers, helping global businesses with successful blockchain integration.
Schedule an obligation-free call with our experts to share your business requirements.