Blockchain improves the quality, reliability and accessibility of data and for this reason, Blockchain technologies have the potential to alleviate various issues for the insurance hub. The insurance sector could be disrupted significantly in the near future and this represents an exciting change in the industry with insurance potentially becoming cheaper, more inclusive and more personalised.
Blockchain; a punch for the insurance industry
The current insurance sector as a lot of paperwork together with a large database to be continuously updated. With tons of claims coming in accompanied by loads of information which needs to be verified, the insurance sector is burden with paperwork and capture a bulk of its human resource in verification and paying claims. Customers on the other end keep waiting and sometimes penalised for a reason and also lose trust towards their insurance providers.
With the step in of blockchain in the insurance space, tins will surely be different and the quality and efficiency of is sector will be revisited towards new horizons and openings.
Blockchain for insurance providers brings in the entire network into a single point of access for information and transactions. The whole network gets information about a digital transaction grouped together in a cryptographically protected block with other transactions that have occurred. The whole as availability of information wit possibilities of verifying the transaction. In this way, Blockchain enables a continuous update of every database with precise information in real time. The entire chain is continually updated so that every database in the network is the same, giving each member the ability to establish securely who has changed what at any given time.
How blockchain will benefit the insurance industry
Innovative and disruptive canes to the insurance sector business model:
- Alleviating paperwork
- Developing a system where some claims can be verified and handled very quickly
- Minimising fraud
- Improving the quality of data used during underwriting
- Generally improve efficiency across the insurance value chain, e.g. Creating processes where claims Can be paid out automatically.
- ‘Smart Contract’ powered by Blockchain and added value for the insurance business
The insurance business is involved with many insurance contracts, ranging from rating a client and deciding on a premium to paying a valid claim and investigating a fraudulent one. To facilitate the execution of contracts, the smart contract can perfectly make tins easier with the blockchain technology. Te contract process can be automated and can perfectly replace the traditional legal contracts. Smart contracts are digitally enable, which will boost efficiency in the insurance value chain wherever time, effort or money is spent to confirm information before processing transactions.
- Reduces Settlement Time
Payments and remittance settlement can happen rapidly allowing people to access their capital when they need it. Time and cost efficiencies could support large amounts of small transactions or microtransactions within a trusted network.
- “Trusted” Third Party Elimination
Storing transactions in automatically shared, a tamperproof database could eliminate the need for complicated procedures and clearing houses and ensure that banks have their records in sync.
The inclusion touch of Blockchain in the insurance sector
Blockchain feature makes transaction cost lower as well as availability to information easier. With lower transaction cost and accessibility of information, more people can be connected in the insurance system. Efficiency brings more trust and accessibility and this is how blockchain brins people more connected to the financial system mainly for the insurance sector.