If you feel its early to tell whether blockchain technology can disrupt the insurance sector, its time to think again. With the level of research and innovation happening at a pace never seen before, the possibilities are endless, and insurance companies and start-ups have started adapting Blockchain. However, there are still certain regulatory and legal hurdles to overcome.
Some of the blockchain killer applications that could transform the Insurance sector include:
1. Fraud detection & risk prevention:
By moving insurance claims onto an immutable ledger, blockchain technology can help eliminate common sources of fraud in the insurance industry. Blockchain’s shared ledger technology can move fraud detection forward by consolidating claims data across insurers. It can facilitate better data sharing, blockchain technology can save insurers the expense of paying for public and subscription data to prevent fraud. Insurers could record permanent transactions, with granular access controls to protect data security. Storing claims information on a shared ledger would help insurers collaborate and identify suspicious behaviour across the ecosystem.
2. Property & Home Insurance
A shared ledger and insurance policies executed through smart contracts can bring an order of magnitude improvement in efficiency to property and casualty insurance.
- Blockchain technology enables automated real-time data collection and analysis, potentially making some types of Property & Home Insurance claims process up to 3x faster and 5x cheaper than at present.
- Automated “smart contracts” can greatly speed up claims processing and payouts, saving insurers to a great extent.
Blockchain technology, can truly transform the way that physical assets are managed, tracked, and insured digitally.
3. Health insurance
With blockchain technology, medical records can be cryptographically secured and shared between health providers, increasing interoperability in the health insurance ecosystem.
- Lack of data can lead to insurance claim denials, which would cost billions for hospitals every year and are cited as a significant factor in rising healthcare costs.
- Blockchain technology can encrypt patient information, facilitating the transfer of information while still protecting patient privacy.
Creating an industry-wide, synchronized repository of healthcare data, and still maintaining the patient privacy is the future we imagine and that is possible with Blockchain I believe.
4. Reinsurance
By securing reinsurance contracts on the blockchain through smart contracts, blockchain technology can simplify the flow of information and payments between insurers and reinsurers.
- Blockchain technology can reduce risk by facilitating information-sharing and cut costs by automating processes, ultimately saving reinsurers a big chunk of their expenses.
- Blockchain technology has the potential to improve reinsurance processes by streamlining the flow of information between insurers and reinsurers on a shared ledger.
- Using blockchain, detailed transactions around premiums and losses can exist on an insurer and reinsurer’s computer systems at the same time, eliminating the need to reconcile books between institutions for each individual claim.
- Blockchain can also enable seamless settlement between the insurers and the reinsurers. Reinsurers can be better equipped to allocate capital for claims nearly in real-time, allowing them to both process and settle claims more quickly.
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