Blockchain technology has undeniable urged the industry IT enthusiasts to explore areas where blockchain in insurance can be incorporated to rip benefits. Folks have witnessed the fame it gained from Bitcoins and how certain aspects of this revolutionary technology carry great weight to transform the conventional dynamics. Banks are in a sheer pursuit of understanding this technology and several with the assistance of Fintech have initiated pilot projects. Although the blockchain technology has not yet been introduced in full swing by anyone who has acknowledged its prosperous prospects. The insurance industry does have several areas which with the influx of blockchain have been expected to revamp and upgrade, addressing needs purposefully. There are certain areas in Insurance Industry where Blockchain technology can play a very vital role.
Blockchain assures trust, and trust deficit is the main factor that has left much prospective insurance client struggling to cater to this trust issue. Also, inefficiencies within the industry and high costs also discourage insurers. With the introduction of blockchain technology, trust factor can be revived as it can be understood from the fundamentals of blockchain technology that it is very transparent and secure.
IMPROVEMENT OF PROCESSES AND DATA ENTRY
If you have ever been dealing with insurance companies, you can better verify this claim that if you want to get started with any plan or acquire your plan coverage, how cumbersome is the whole process and inefficient the data entry process is. Blockchain with its consensus allows data to be verified and the individual can control it. It is an efficient system with the synchronized database over the blockchain network. Data verification is very necessary for companies and if it is acquired with all transparency intact then without any further need to enter data again, it can be granted access to others. ‘Tradle’ is streamlining the data entry with the blockchain technology to meet requirements of ‘Kow your customers’.
The clients of insurance companies are facing frauds and every year millions of dollars are sacrificed in fraud scams and claims. Smart contracts in blockchain technology can be an effective means to address claims and also minimize the level of fraud that is hindering the transparency and efficiency of the insurance industry. When blockchain technology is in place, it will receive and verify the claims or contracts and when it is made part of a chain, it will be ensured that only genuine claims will be paid. It will also show if fake claims have been submitted against any contract and when it is verified the payment will be furnished without any involvement from others. Like this claims will be addressed hastily and efficiently.
EFFICIENT HANDLING OF CLAIMS BY SMART CONTRACTS
With the smart contracts, say for e.g. you want to serve peer to peer networking and businesses. For this purpose P2P, blockchains will have pre-defined rules with the availability of authentic data. It will handle claims very effectively in a way that for instance payments could be furnished to farmers when it was verified on par with the set of data available that they have a genuine need to be paid. Similarly, other micro-insurances with least cost involved can be easily supported with blockchain smart contracts.
Even automobile sector can use this technology to verify the claims of car owners and even the individual can themselves register and supervise their claims. In case of any accident or damage, the claim will be paid off without any further hassle.
So it is understood from the underlying factual needs and consequent solutions of Blockchain technology that it can yield positive turnover for an insurance company with respect to its services.
- The need for too much paperwork and record keeping will be omitted
- Due to smart contracts claims would be verified and responded in a very short time-saving customers time and money
- Fraud detection and elimination with detailed encryption and authentication, validation process.
- Transparent data record
• Improvement of processes to increase efficiency.