The Insurance Industry needs a consistent, inclusive registry

Blockchain technologies have been attracting a lot of hype on how they can be used to solve a lot of problems in various industries. Most industries invested in these technologies for various sets of reasons with very little variation in the results that were achieved. The use of blockchain technologies has been largely around trying to fit a solution for a problem that may or may not exist.

There would be thousands of examples where technology companies have been able to convince their enterprise customers to implement this technology for reasons beyond any valid sense. Some companies implemented blockchain to test the technology for sample use cases and ensure that their people/organization are geared to leverage the technology when a real use case is identified

The Insurance industry in India has some examples where several companies got together to fulfil some use cases. Some press reports dated back to 2017 mention that a consortium of 15 Life Insurers engaged with a technology service provider to build a blockchain solution for sharing data with an aim to reducing fraud and money laundering.

On a parallel track, the insurance regulator in India, IRDAI provided a mandate to NSDL to set up a National Insurance Registry that would help customers access all their policies under one e-Insurance Account (eIA). Mass adoption may not have happened due to several reasons; however the mode appears promising and needs to be explored further.

Multiple use cases in the Insurance industry need a solution where data can be stored at a common, securely accessible location for all the insurers. No Claim Bonus, Pre-existing disease and other health records being the most obvious and prominent ones.

Blockchain technologies are good in the following situations:

1) Need to keep records and transactions decentralized;

2) Non-existence of a centralized authority that is capable of storing and securing this data;

3) Political, cross border concerns where none of the parties can be trusted.

None of the situations seem applicable to the insurance industry as it is heavily regulated, and with clear direction and support most of the use cases can be driven from a central registry. Unique technical capabilities of the blockchain if at all required can be delivered using traditional technologies with ample governance procedures. Using the centralized mode will also ensure the inclusion of all market participants through regulation.

In conclusion, there is a dire need of an all-inclusive registry that can help reduce claim frauds and underwriting risks. Based on aforementioned points, centralized registries with appropriate mandates, governance, and technology seem to score over alternate decentralized record keeping methods especially in a regulated industry like Insurance.