Blockchain Applications In Insurance
Every day blockchain is concurring one industry at a time. After establishing all the ground for Bitcoin, the system is now taking over logistics, healthcare, and insurance industries. Ruling everything coming at its way, it’s time for corporate organizations to come forward too.
The merge of blockchain with every other industry seems to be successful so far. However, can it still be fruitful with the insurance corporations too?
There had been a lot of recent developments occurring around the insurance issue. Many companies have already started to merge, and small-time investments are on the way.
Should Insurance Agencies Look Into Blockchain?
First of all, insurance companies are a collection of groups of people, such as service providers, insurers, and customers. All of these groups get interlinked in an orderly fashion.
Services include compensation for any kind of injury or loss. The service providers are responsible for that, and to help them find out whether specific rules are met the insurers exchange all of the information. So, if they can ensure that a particular event happened and specific rules are met, then the customer will get the related money.
In this regard, blockchain can provide a seamless connection between the processing, storage, and distribution of the guaranteed money.
They are not just a ledger, but they are a smart database system, which can be the best solution in this type of scenario.
Look below to see the main advantage points of blockchain in insurance:
· The higher end of efficiency, making the process simple.
· Rapid turnaround time for an insurance claim.
· No risk of fraudulence activities.
· Premium policy reduction.
· A better experience.
· Automated paychecks.
Insurance Organizations Leading Towards a Trusted Solution
Use cases in this field are already on the rise. Many popular companies have already integrated this technology into their system. One of the names is Lloyds, which is a popular vendor in London.
Other companies such as Safeshare Global, Everledger, and insurtech Etherisc are also making it a reality.
According to them, blockchain makes things much easier to do. Before, there were loads of paperwork where both the customer and the company employees had to fill up in order to process insurance. Not to mention the hours and hours of hassle it took to get work done.
However, with smart contract feature of the blockchain, the process can be easy. Everything will get uploaded on the network, and after meeting specific terms, the funds will get automatically released to the customer.
Auto Insurance Claims
How will auto insurers utilize this marvelous tech? The connection between peers is essential for auto insurance. It helps to prevent fraudulent claims and accelerates the process accordingly.
This process helps all the customers to get premium quality support and have a hassle free insurance claim.
Like before, smart contracts will notify specific parties to fulfill their duties accordingly. If it goes on like this, using the IoT system they can even track every vehicle and measure the amount of damage without any help.
Customers then can get paid according to the extent of the damage. Many companies already use Usage-based insurance and being merged with that blockchain will genuinely be revolutionizing.
The most prominent feature of blockchain is to maintain data integrity and manage all this seamlessly. Medical institutions, on the other hand, are in need of a technology that tends to all their data security issues.
In this case, blockchain can connect all parts of a medical institution and help in processing insurance claims.
Patients will be able to claim their insurance and get coverage based on their insurance type.
Many people think that life insurance is a simple organization. A customer buys an insurance policy, and after he/she dies, the family gets the money. Well, it’s a lot more complicated than that.
The typical process is somewhat like this:
· After a particular person’s death, a family member regarded as executor will file the claim.
· He/She then gathers up the money and then pays for the funeral.
· After that, they need to make sure that everyone gets their fair share of a portion according to the insurance rules.
But to make things go smoothly, he/she needs to have specific information on them, which is not the case always. The need to figure out if the death was legitimate or if any other fraudulence activity occurred or not.
Blockchain, on the other hand, will eliminate the need for a middleman and help to process the grief without worrying about the insurance. Every facility from the hospital to the funeral organization will get connected in the network.
Improving the Trust
Financial service organizations suffer a vast deal for their trust issues. Even though banks are the central core of this but other corporations connected to it suffers greatly. The lack of trust, a greater amount of cost and over inefficiency drives a rift among the consumers and organizations.
This is why, people get less interested in obtaining insurance, just because of all the hassle and trustless environment. Sometimes the systems might be rigged too. Insurance companies try their best not to process an insurance claim. And ordinary people suffer much from it.
Blockchain pinpoints the problem and gives both parties an excellent, secure and trustworthy network, where everything is automated.
No one can get favoritism, and the system can’t get rigged. So, it’s an easy solution.
How Can Blockchain Detect Fraud Claims?
One of the major reasons for looking into blockchain should be to detect any scam. The FBI did thorough research and found out that more than 10% health insurance claims are fraud and for that 40 billion dollars get scooped up every year.
Validation is required, and blockchain can help attain it. As I will collect all historical data from a user, it will be easy to find out if the customer is eligible or not. Once a block gets made in the network, it can’t get altered.
So, no one can alter files and false claim insurance. Customer authentication will also be required for uploading the information in the first place. That’s why it’s full proof method.
Insurance is one of the basic needs now, and every company should come forward into making it more lucrative. Integrating blockchain will revolutionize their system, getting rid of all the faulty middleman.
While how exactly they will integrate is still on the research ground, needless to say, everyone agrees that it can disrupt the usual way of insurance.