What Role does Blockchain Play in the Insurance Industry?

Insurance CIO Outlook | Tuesday, May 24, 2022

Blockchain in claims processing can assist develop a trust-based, efficient, transparent, and customer-focused paradigm.

Fremont, CA:  Blockchain has been among the most popular technological buzzwords. It has been dubbed the "new Internet" because of the projected influence it would have on the globe across all industries.

Blockchain appears to be connected with the financial industry, owing in part to its association with bitcoin. However, blockchain might be the ideal solution to a slew of issues confronting the insurance business because of its inherent nature. And it more than needs to be properly evaluated as a potential alternative for most insurers' existing central database approach.

Blockchain has the potential to solve a wide range of insurance problems.

Because of the transparency of blockchain, its implementation overcomes many of the problems associated with insurance policies, such as gaining customer authorization or approval and cooperating to invest funds in common resources and infrastructures jointly. All policy information is precisely and in real-time recorded. Every transaction has its own set of dates, times, participants, places, and values. Because blockchain distributes consent, this information is immune from any unwanted or unlawful modification or alteration, making it safer than any previous technology.

Let's look at two of the numerous blockchain applications:

Claims Processing Using Blockchain

Blockchain in claims processing can assist develop a trust-based, efficient, transparent, and customer-focused paradigm. Typically, the claims process begins with a consumer submitting a claim request by phone to a customer service center or via notification via a mobile app. Instead of this time-consuming process, a direct link may get established between the claimant, insurer, and third parties, with all data, instantly uploaded and an audit trail provided. Making the claims process centered on the insurance company wouldn't even need significant buy-in from other players.

The use of blockchain to retain customers

Customer retention is an important business goal for every insurance. As a result, insurers always seek innovative methods to improve client satisfaction and customer-centricity. For example, several insurers invest in client loyalty programs that provide point-based rewards. The blockchain can help with this and perhaps take it a step further by allowing a platform that allows for seamless point exchange across different loyalty programs - a virtual loyalty trading platform.

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