Simplifying business processes and driving business outcomes are two key components Blockchain can offer to Insurers. Investing in design thinking Fintech like Blockchain will spur innovation in your enterprise. With increase, uncertainties happening globally, the insurance industry have many services to offer and there are many competitors in this sector.
To be ahead of your competitors eliminating outdated systems that are the root cause of inefficiencies are key drivers’ pushing insurers towards Fintech technologies. Blockchain is the solution tap in efficient solution rendering faster transaction with more security and transparency in the whole process chain of an insurance company.
You can trust blockchain for its privacy;
A blockchain network is distributed, so the necessary documentation can be made available to whoever has permissioned access. The records are secured with cryptography and linked together, which prevents them from being altered retroactively. These characteristics facilitate the secure sharing of information across an organization and to appropriate third parties. Plus, if customer identities are already secured with blockchain, insurers can efficiently verify their eligibility without needing to go to multiple sources.
The different areas where Blockchain can leverage;
- Underwriting: Accepting liability for commercial risks involves mitigating exposure to the insurer to the extent affordable premiums can be offered to the insured. Limiting exposure involves finding other more efficient risk pools to recede risks at a lower price. The options available for recession are limited by the insurer’s ability to share information about the insured as well as rigid standards of risk recession.
- Claim settlement: Settling claims is often a lengthy and complicated process. Pools of property and casualty (P&C) risks are usually shared by multiple parties, including insurers and reinsurers, who are expected to jointly indemnify the insured of losses to the extent of the insured’s interest. However, the risk is distributed across complex layers of paper contracts with very little transparency and information sharing between stakeholders, leading to inefficiencies from cost and time perspectives.
- Fraud and abuse: Inspecting and analyzing enormous amounts of structured and unstructured data to uncover fraudulent activity is a daunting tasks
- Client onboarding: To satisfy compliance requirements such as KYC (know your customer), insurance providers must collect, validate and verify key documents to prove characteristics such as name, address, birth, health and economic status. Time delays are common as various third parties and internal departments must review the data to complete their due diligence processes. Then, companies spend vast resources fixing any errors that occurred while records were being reconciled.
Blockchain in practice for insurers
cases where blockchain technology is already being used in the insurance industry and the successes they are seeing:
Catastrophe swap and bonds: Transactional processing and settlement between insurers and investors can be significantly accelerated and simplified by blockchain-based contracts.
P&C claim settlement: Claims processing can be automated using trusted third-party data sources and the codification of business rules in smart contracts on a distributed ledger. Transparent and immutable data on a distributed ledger can also reduce fraudulent claims to a fraction of what they are today.