TOWARDS A DECENTRALIZED INSURANCE INDUSTRY
Technologies that make an entry in our life brings innovation and new opportunities across the globe. But many people are resistant to technological changes and they often lack the ability to perceive how new technology can actually improve their life. Many technologies make our life more exciting and change the life by reshaping the way we want them to perform in daily roles. Technological innovations can, in fact, disrupt the whole industry and change the manner in which we work along. It compels such industries to adjust and to be displaced. The most current innovation that is rapidly turning into the following real disruption is blockchain innovation. Some prominent industries that have already adapted to blockchain are-banking, real-estate, healthcare, legal, politics, insurance, startups, education, music, and video etc.
This blog briefly explains how blockchain disrupts the Insurance Industry.
The so-called million-trillion-dollar Insurance industry has been around for a considerable period of time. While different industries are adapting themselves to the new changes and innovations, the insurance industry in many ways is still stuck in the past. Even after the advent of online brokers, it is found that consumers indulge in direct phone calls to insurance brokers for purchasing new policies. Policies are done on paper contracts which means its prone to errors and requires further supervision of humans. Also, the complexity arising out of consumers, buyers, insurers, and reinsurers intensifies the whole concept making it prone to the larger number of risks. Blockchain has been developing as the focal vault of truth for many businesses. It is constantly picking up the pace in the insurance business. This has caused disappointment in the overall framework where data can be lost, policies are confounded and settlement times protracted.
The benefit of blockchain in the insurance industry is that it brings security, transparency, adaptability, immutability, and secured data which makes a feeling of trust. The intrusion of blockchain or the blockchain disrupting the insurance industry is not the mere theme of exchange but also an indulgence of high purposive discussions among the investors, innovators and insurance providers.
There are numerous reasons that make blockchain a hot discussion topic. Those interested can read our previous blog titled Top 12 benefits of the Blockchain. With the advent of new characteristics in the blockchain, the demand of blockchain is growing day by day. It is soon turning out to be the basis for every public sector applications. Coming into the insurance sector, the blockchain act as an unbeatable solution as it substitutes with an Internet-based networked database for storing the data in utmost secure and protective format. It doesn’t induce any threats unlike the conventional database of insurance industry faced.
The innate highlights of blockchain offer arrangement of advantages to the insurance companies, any semblance of which incorporate :
> Seamless proceedings
> Less processing period
> Minimal fee
> Immune to fraudulent activities
> Easy access to real-time info
> Improvised customer satisfaction
> Upgraded KYC compliance
The major areas where blockchain is reconstructing the insurance industry:
Underwriting is amongst the most critical part of an insurance industry. The department that is in charge of checking the genuineness of the claim, and choose how many levels of the claim can be covered is dependably needing a reliable vault of information. Blockchain offers to be the focal archive of truth. Using blockchain, guarantors can source information from outside sources to mechanize few parts of endorsing, as information in the blockchain turns trustable that too from a confirmed source.
Here, cases imply claims. Enhancing the cases handling strategies is dependable on the plan for the day of insurance companies. What's more, for the client is presenting a case and getting it affirmed, which is yet another annoying process; considering the quantity of information to check and the amount of manual work required, it can even take a long time.
With blockchain, the greater part of the necessary data that is required for claim confirmation can be handled in a matter of seconds. Since blockchain can take contributions from different sources without altering any data, insurers can utilize the data accessible in the blockchain to track its use.
Today, every client is required to confirming their KYC with the insurance company. insurer and customer squander a ton of time checking their records and character. This can be decreased with a blockchain platform that can converse with other blockchain platforms to confirm the character of the customer.
The records in the blockchain can be made accessible with the ones who have consented to see the data. All the client records are safely put away in the blockchain utilizing secure cryptographic strategies.
Purpose of choosing blockchain for the Insurance industry is as follows.
Decreases the data fraud: One of the real issues looked by the insurance industry is false claims, identifying fraud and the time taken to approve every application. Here blockchain may come as an answer. It can fill in as a dispersed enlist which has internal as well as external customer information. Once the framework is set up, and the data is carefully entered, it would naturally approve the records like address proof, medical reports, and so on. It won't just accelerate the whole procedure, in the meantime, it will diminish human interference in this manner limiting the possibilities of mistakes.
Decentralized information storehouse: One of the significant issues that trouble all the business specialties is the security of the information. All the present framework that we are utilizing whether, in healthcare, insurance, and banking services, there are high chances of disclosing information to the outsider. We have heard numerous instances of information being hacked. Blockchain can develop as an answer for the same. In blockchain, every information is distributed in chronological sequence, that too encrypted, secured and safely held.
Saving cost: Blockchain, due to more efficient information processing and less prone to fraudulent risks, it can cut down the cost brought about amid the insurance procedure thus saving the cost.
Blockchain in various insurance verticals
Presently I would feature the reality about how blockchain will be helpful in the diverse insurance division. We as a whole realize that getting the insurance claim can be a wreck and an unwieldy issue. To chop down this, we require forms which are streamlined and interconnected; blockchain offers a progression of advantages which will catalyze the whole procedure of the protection business. Here is the manner by which it can happen on -
> Blockchain in Health Insurance-Blockchain is about managing and administering the information, by interconnecting all the medical care facilities, patients, doctors, insurers and so on blockchain can enhance the level of patient care.
> Blockchain in Auto Insurance-There is two different ways by means of which blockchain can turn out to be advantageous for the auto insurance industry. To start with, it can connect every client, service providers with the assistance of a shared record, so that all the data will be promptly accessible. It will help the auto insurers in decreasing the fraud and risk. Second, with the assistance of smart contracts, the claim will secure up.
> Blockchain in Life Insurance Industry-life insurance may sound an extremely clear and not so complicated process. but, getting the claim from the insurance company is a devastating process. It makes you confront a list of questions and inquiries, numerous paper works and make you spend money, time, effort and energy. but, with the assistance of blockchain, we can expect some alleviation here. By making a consortium of medicinal facilities, government organizations, and so on, one can easily get all the data.
While blockchain technology is still in its early stages, there are now various promising use-cases and applications for it in the insurance industry. Allianz and Swiss Re, are a few examples. In spite of this mind-boggling interest for blockchain technology, there's a wide space to cover before it can have a critical impact on the insurance industry. The blockchain is an innovation which still needs direction and government control.
Blockchain innovation is still futuristic, and its practical application in the mainstream is yet to be accepted globally. However, the blockchain holds its own exclusive attributions making it a promising technology that can be implemented in the insurance industry and also in other sectors.