Accountability, efficiency, security, and glass-like transparency- these are the primary perks that compel businesses to keep tabs on Blockchain disruptions. The insurance industry, just like several other verticals, is keen to leverage this game-changing tech to help insurers save their valuable time and funds, alongside pumping up customer satisfaction.
Today, the banking industry and the insurance sector have embraced the Blockchain revolution with open arms. The SAP Digital Transformation Executive Study suggests that senior executives from the banking and insurance world are planning to double up their Blockchain investments by 2019. This is nothing but a telltale, unveiling how both banking & insurance are ready to transform their traditional model and streamline their processes via the Blockchain potential.
Talking about the insurance industry in particular, Blockchain technology is put in place to magnetise tech-savvy customers and mitigate the challenges whirling around data sharing, claim processing and frauds. Leading Blockchain development companies know how to engineer high-performing applications to add a thick layer of security and create a transparent ecosystem.
Current Pain Points within the Insurance Industry
The insurance sector is vast and complex- there are several issues that demand a more organised approach to beat current orthodoxies and challenge following pain points-
There are several use cases where Blockchain can supplement the industry- from underwriting to claims processing, client onboarding, identity management, fraud detection and more, the technology can be largely exploited to ease out the pain and nurture trust between the parties involved. Over the time, this will result in optimised efficiency and creation of a satisfied customer base.
How Blockchain Solutions Can Be of Help?
We understand- the concept of insurance is ages-old and ingrained in our society, while Blockchain technology is still in its infancy. Still, the meld of these is ideal to address several critical changes which insurance providers and insurers confront time and time again. From automating processes to checking counterparty risks, reduction of duplicate processes and enabling secure and decentralised transactions, Blockchain can do a lot to check the issues that crawl into the insurance sector. It can prove to be a transformation catalyst in multiple insurance streams such as-
Health Insurance- A Blockchain application looping all hospitals/clinics, lab vendors, physicians, and insurers can streamline the flow of health information for enhanced underwriting and claim validation.
Life Insurance- A private Blockchain can be developed by combining the death registration and the death claim procedures- this will streamline claim settlement.
Crop Insurance- Collaboration with weather consulting and analysis team to automate the process of fraudulent crop insurance claims.
Home Insurance- Home insurance sector can also be made more fast & transparent via Blockchain, making claim settlement easier.
Travel Insurance- A unified ecosystem can be built by connecting travel departments, agencies, and insurers for automated claim processing.
Here’s a brief narrating the expansive utility of Blockchain revolution in the insurance arena-
Automated Claim Validation, Assessment & Payment
The manual process of validating and assessing claims eats up a lot of time and comes with a room for error. Blockchain’s smart contracts are an ideal tool to check mistrust between parties involved. Insurance industry these days is beginning to make space for personalised contracts.
Via Blockchain, policyholders & insurers can digitally track and manage policies and physical assets, and leverage smart contracts to codify business rules and automate the claims processing alongside providing an indissoluble audit trail. Smart contracts link real-time information from different systems across multiple physical documents & actions that lead to other processes like claim processing, transactions, reimbursements and more. The perk here will be accuracy and speed, thus empowering insurance companies to potentially eliminate the possibility of frauds and deliver gratifying customer experience.
We know, Blockchain is a public ledger, but its mechanism is devised in a way that there’s no room for suspicious or duplicate transactions. This decentralised repository can be referred to verify the identity of customers, policies, transactions and more by providing an access to historical records. With this, it becomes difficult for hackers to corrupt or steal vital data.
Identity Management / Client Onboarding
When it comes to digital identity management, Blockchain is a true game changer.
To create a secured insurance ecosystem, it is must for every customer to complete their KYC with their insurance provider. Generally, insurance companies, as well as customers, are compelled to go through a tedious document and identity verification procedure. An insurance provider can exploit the power of Blockchain to check KYC details of an incoming customer with other providers and also verify their identity by assessing the connected government databases. A Blockchain platform can ‘talk’ to other Blockchains to verify user identity. Each record will be secured and accessible to the ones who have the permission to view that info.
Reinsurance is a complex process with grand volumes of data involved. The procedure takes place when one insurer transfers portions of risk portfolios to a reinsurer. It is possible to use smart contracts to secure reinsurance contracts- this way, Blockchain can provide a simplified flow of information & payments between insurers and reinsurers.
With all that being said, it is safe to say that the insurance industry can be made more efficient with the incorporation of Blockchain. Though we won’t say that Blockchain is the panacea to all challenges of the insurance world, it can definitely streamline operations, prevent fraudulent activities, and drive efficiency. It would create an environment of trust and reduce dispute resolution costs, thus making things better than ever.
At Studio Fintech, we make it a point to leverage Blockchain and FinTech to help modern industries boost their operational performance. Our domain experts have created several successful Blockchain projects and working on a handful more to make new businesses more competitive and customer-friendly. If you have some Blockchain development idea in mind, do get in touch– we would love to help you dive deep and be a part of digital disruption!