By now you must be aware of the blockchain technology and the impact it has on various industries. If you are wondering how the technology would fit in the insurance industry, then you are not alone, there is still time for you to learn about the technology.
Giants in the insurance industry and even the startups are in the attempt of using blockchain technology in order to prevent insurance fraud, track medical records digitally and do much more with it.
The impact of blockchain technology is long-term when compared to other technologies like artificial intelligence(AI) and the Internet of Things(IoT).
Nevertheless, the flourishing number of blockchain industry and the start-up ecosystem initiatives cannot be neglected.
Insurance has been around for centuries. The very first instance of insurance dates back to thousands of years ago when Chinese merchant seafarers pooled collective funds of theirs to pay for the damages of any individual’s capsized ship. Although the insurance industry is a multi-million dollar industry, it is still stranded in the past.
Here are a few use cases of blockchain technology; these are the areas where blockchain is proving to be disruptive in the industry.
The costs that insurance companies aim to reduce are of fraudulent claims. These claims are mixed up from insurees to insurers and reinsurers in a process that is slow also involving a lot of paperwork that moves across different parts. This process creates favourable circumstances to generate several claims across distinct insurers for a single loss.
The insurance companies can use the blockchain technology to curb down their costs that are associated with fraudulent claims. Blockchain or the distributed ledger technology can help identify the authenticity of customers, policies, and transactions by offering a complete historical record.
The blockchain technology enables insurers to rectify the transactions or those involved in malicious practices. The development of industry-wide fraud prevention is marred with constraints that are revolving around the personal sharing information like name, address, date of birth, etc.
Also Read: 3 Ways Blockchain Can Help Combat Fraud
2. Processing of Claims
The essential of things that an insurance company has on their list is improving the claim process. The users often find the process of submitting claims and getting it rewarded an exhausting process.
If considering the number of data points to verify also the amount of effort required, the process may seem to be a bit time-consuming.
The blockchain technology the most relevant information that is required for claims verification are processed in quick time. As blockchain receives inputs from multiple resources without tampering any of the information, the insurers get to utilize the data that is accessible in the blockchain allowing to track the usage of the asset.
Healthcare is afflicted by an inefficient ecosystem of providers, patients, and insurers.
Throughout the life of a patient, they might see multiple doctors and specialists. Due to the numerous parties involved in health care, it gets hard to share and cooperate sensitive medical reports or data between them.
The medical records travel across different healthcare providers and insurers, thereby creating a duplicate and incorrect records across multiple organizations that cost hefty administrative overheads also unnecessary procedures for patients.
With Blockchain, you can maintain the privacy of a patient, whilst creating an industry-wide, an integrated repository of healthcare data. In short, technology will help save the industry billions.
The adoption of blockchain technology is crucial as sharing data and cooperating is difficult in the healthcare sector.
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Underwriting is another essential part of an insurance company. The company will be responsible for identifying the authenticity of the claim and also decide the percentage of the claim can be covered when in need of a reliable repository of data.
The blockchain technology offers to be a trustworthy central repository. In the utilization of blockchain, underwriters can source data from external sources, allowing to automate some facets of underwriting, as the data in blockchain is reliable from a verified source.
The blockchain technology is considered to be something infancy, but there are many promising use-cases and applications in the insurance industry.
If you are dealing in the insurance sector, these use-cases might come in handy and the technology must be explored thoroughly before terming it as a failure.