Blockchain's Future In Insurance Takes Shape

By Enterprise Security Magazine | Thursday, June 13, 2019

FREMONT, CA: The hype mostly surrounds cryptocurrency, and customer-facing applications as the advanced blockchain technology has been lodged in. The most significant impact that blockchain lies at the intersection of the Business-to-Consumer (B2C) spaces and Business-to-Business (B2B) as well. Blockchain technology, in future, will affect each aspect of the insurance industry. There are many benefits to implementing blockchain technology. It includes permanent records with easy-to-track audit trails; permission-based documents access, smart contracts that automatically execute and fraud detection.

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•  Fraud Detection in Insurance

There are many insurance frauds, including fee churning, premium diversion, asset division and workers’ compensation fraud. These are collective schemes that have a more significant impact during times of disaster. Fraud detection is one significant benefit of insurance blockchain products. The permanent record provided by a provider’s blockchain prevents multiple claims from being filed from the same accident. These providers may also need to provide biometric information before they can upload data to the blockchain.

•  Insurance claims processing

A portion of the industry ripe for disruption is insurance claims processing, management and blockchain technology. Blockchain improves claims processing with physical asset tracking, enabled by the internet of things (IoT). Automating the claims process is a huge task, but multiple insurtechs are working to solve this issue.

•  Smart contracts in insurance

Smart contracts are an essential use of blockchain technology. The insurance industry has a particular purpose for contracts housed on a blockchain that automatically execute. A customer with a claim can submit relevant documents to the provider via a consumer-facing application on their mobile device. The claim is then processed by an AI-powered engine that determines if it should be flagged for further review due to fraud concerns.

•  Reinsurance

Reinsurance attributes to insurance that is purchased by an insurance company. It is necessary in cases of catastrophic events. The primary insurer and the reinsurer need to share a lot of information amongst themselves for this process. The interaction currently stilted by the lack of streamline, leading to a lot of wasted effort on both sides.  The difficulty of data sharing should be deleted, allowing both parties to the same data.

The transitory period will likely see consumers and insurers experience adverse conditions, as the change represents a significant technological shift. The widespread implementation of blockchain, in the insurance industry, is profitable in all the ways.

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