Blockchain, a well-established system of recording information on an endless digitally distributed ledger, has undergone significant improvements and varied applications since its launch. Blockchain Technology has now proved its significance in many areas, including the Insurance Industry.
Read this article to know the role of blockchain into revolutionizing the insurance sector.
7 Unique Implementation of Blockchain Technology in Insurance Industry
The 7 reasons that are mentioned below will educate the readers who are aspired to know the role of blockchain technology in transforming the insurance industry.
Life Insurance Policy Purchase and Activation
The process involves documentation for KYC and filling out the application form. Most of the time activation of an insurance policy is delayed due to delay in document submission.
To address this delay, blockchain technology can be immensely helpful. A various private and public organization can club together via a blockchain network to streamline the document retrieval and verification process.
For reference, when an individual undergoes the underwriting process at the time of buying an insurance policy, the insurer can easily retrieve the supporting documents from the government identification organization and healthcare authorities through Blockchain Technology.
Introducing the concept will not only reduce the customer’s effort but the automated document retrieval and verification will cut short the time consumed in the process.
Managing Independent Agent Contracts
This can be quite challenging. There are many aspects that are accomplished manually such as processing of arrears, claw-back commissions, license management etc.
The main problem that arises with the manual nature of the job is that it makes the entire process error-prone and less efficient. Due to all the challenges that are associated with managing agent contracts, blockchain technology can be the ideal one to resort to.
With the help of Blockchain Development Services, brokers and agents can be added on the Blockchain network and execute operations via a digitized and protocol-based system known as the smart contracts.
It is something that can be foreseen by an insurance company. However, the process of subrogation involves multiple parties that makes the entire system much more complex. Subrogation, a process that involves the insurance company (of the victim) to retrieves the money from the insurance company of the party that is at fault at the time of the accident.
Because of the multiple parties involved in the process, it tends to get time-consuming and might even require legal consent for data collection, sharing and validation.
However, blockchain technology can help the insurer, insurance company, and liability insurance (also the independent claim regulators) to connect in a better way.
This is yet another vital application of blockchain technology that can be helpful to upgrade the working of the insurance industry. The process involves sharing the risk associated in an event of a settlement of a major claim initiated by an insured entity.
The main challenge that is faced while undergoing a process of reinsurance is that the data is to be entered multiple times at multiple junctions and the stakeholders that are involved have varied premises and so are their working protocols.
But with Blockchain Technology coming into the scene, all the challenges can be fixed instantly and the entire process can be streamlined via a shared blockchain network.
Fraud detection and reduction
This is an important component of any insurance company. Any fraud claim initiated, processed and completed is a failure and loss of the insurer.
The blockchain services can be utilized to automate the process of fraud detection by conducting mandatory audits eventually reducing the risk of fraud.
To achieve fraud detection and reduction, blockchain technology can be deployed to access each and every transaction that is taking place on the network. This way, it will help the organization to detect any special Points of Compromise and fix it on a real-time basis.
Peeking into their own record
It is another important application of blockchain technology; however, this time it is helpful for the one purchasing the insurance. Unlike the traditional methods that involve the insurance agent to know the claim history and details about the purchased policy, with blockchain the user can directly access the registered account on the network and view the insurance history.
No more repetitive inspections
Required once an organization registers itself on the blockchain network. It does not mean that no inspections will be needed at all, but once the company passes the initial inspection, all the information can be then added to the stakeholder’s blockchain directly without any requirement of repetitive inspections upon updating the data.
The Future of Blockchain in Insurance Industry
Starting its journey from cryptocurrencies, the blockchain as a technology has successfully penetrated to become the mainstream tool for various industries.
As mentioned in this article, Blockchain Development Services are appreciated by the insurance industry for various reasons. If all these inspire you to invest in the new-age technology, then a reliable blockchain development company is all that you require.