How Blockchain Justifies its Reputation in the Insurance Industry

By Insurance CIO Outlook | Tuesday, June 09, 2020

The insurance industry is now starting to tap the potential of blockchain to score big on efficiency and cost-optimization.   

FREMONT, CA: Blockchain has been a buzzword for some time now. For tech-savvy insurers, blockchain might be a treasure trove of possibilities, but for someone less aware, applications of blockchain in the domain of insurance might seem complicated. Despite this dichotomy, there has been a steady surge in the adoption of blockchain-backed solutions, giving the technology a good reputation in the insurance sector. For insurance companies that are still trying to form an opinion regarding the value that blockchain brings, the time is suitable for a reality check. The following list points out potentially simple applications of blockchain through which insurers can judge the technology’s prospects.  

• Instant Access to Accurate Policy Information

Access to policy information can be systematized with the help of blockchain technology. Conventional ways of providing proof of insurance are subject to limitations. Producing insurance policy papers often results in delays and confusion, creating inconvenience for insurers as well as the insured. An article published in Risk & Insurance that talks about simple use cases of blockchain technology in insurance, gives an example of how a trucking company can enjoy cost savings when policy information is added to the blockchain, making verifications faster.    

• Automated Communications and Claims

First notice of loss is a critical step that can subsequently impact the entire claims process. When blockchain technology is leveraged, first notice of loss becomes uncomplicated. Besides, blockchains make it easy to communicate sensitive information in a secure way, creating the foundation for a partially automated claims process that benefits insurers directly by ruling out frauds and delays.

• Secure Transactions

Blockchain is well-known for the security it offers. By deploying blockchain, insurance companies can add multiple layers of security to transactions. The fact that the transaction details are stored on immutable ledgers and can only be accessed by involved parties makes claims payments frictionless and convenient.

A careful assessment of the cost benefits of deploying blockchain technology also paints a favorable picture. Thus, it is safe to say that for a majority of insurance firms, the reputation that blockchain technology carries today, is valid.

See Also: Top Claims Processing and Management Technology Companies

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