Blockchain on a mission to enhance the Insurance industry
The term “Insurance” is being used from the past several years. In the early centuries, the Chinese seafarers used to keep safe a depository to pay in case of loss, this depositary amount which would give them the sensation of being insured. This backup fund is called the Insurance amount. In this article, we will be focusing on the use of blockchain in disrupting the Insurance industry.
The need for blockchain in the Insurance industry
There are a large number of problems in the Insurance industry which are as stated below
Difficult to buy an Insurance policy: In the past several years there are a large number of online brokers who are assisting customers to buy a policy via online interface but still many of the consumers are engaged in making a purchase of Insurance policy via phone calls these are not only error-prone but also requires a lot of time to process the final results.
Limited growth in the Insurance industry: The poor methodology adopted in the Insurance industry makes it very difficult for policymakers to reach a big population. A large number of people are still struggling to determine which policy suits them.
Unable to handle the excessive data load: Insurance market comprises of policymakers, consumers and service providers, thereby, it is required to deal with large amounts of data. Hence the system is required to be very efficient in dealing with a big audience, avoiding any system crash.
In order to provide a better solution to these very issues a large number of startups are working to bring blockchain into play so that the Insurance process becomes more efficient, transparent and accountable. Thereby, helping the insurers to save time and money.
Blockchain the ultimate solution
The blockchain’s ability to bring a more robust system which is accountable, transparent and secured is beneficial for sustaining the Insurance industry for a better outcome. Some of the key features that blockchain can bring in the Insurance industry are as follows:-
Identification of false practice and mitigating the risk associated: The Insurance claims filed contains very sensitive data thereby storing all these data over the immutable ledger, we can almost nullify the occurrence of any fraud and hence mitigate the associated risks.
Improved trust by smart contracts: By using the smart contracts to execute the Insurance policies, we can build trust among the insurers. With the use of the smart contracts, there is no need for the Insurance policy buyer and the policy provider to take permission from any third party, thereby not only the process is made faster but also the entire interface is made more efficient removing any intermediary
Efficient health Insurance: By the use of blockchain technology, we can easily store the patient’s record and access them whenever required. Thereby, the exchange of information across a large number of people is made possible.
Hassle-free renewing of Insurance policies: There are instances in which the same person who was owning an Insurance policy looks for buying the same policy or we can say, renewing the old Insurance policy. In this very situation, we can use blockchain technology to revive the same data that the Insurance buyer had provided at the time of buying an Insurance policy for the first time.
What are the people saying over the use of blockchain technology in the Insurance industry?
“In Insurance, blockchain can enable transaction flow across multiple layers of counterparts from original insured, to brokers, to primary carriers, to reinsurers, all the way to capital markets, potentially redefining the standard for digital transaction processing”
-Jags Rao, Director, Distributed Ledger Technology at Swiss Re
“With all parties using the same ledger that directly captures all the metrics of the transaction in digital form, there is no more need to translate legal documents into metrics. Next to efficiency gains, the additional benefit of blockchain is that every action creates a virtually immutable record which ensures that the parties know exactly what is agreed, but also by who and when the contract was approved and signed”
-Mark Bloom, Global CTO Aegon
“Insurance transactions are currently far too tedious and frictional. Blockchain technology has the potential to facilitate the desired development that is long overdue”
-Lars Henneberg, Head of risk and Insurance Maersk
Summary
Therefore, blockchain technology is the next big thing to make an impact in the Insurance industry by bringing more accountability, transparency, security, and effectiveness. Looking over the present condition, the Insurance companies are required to streamline their processes and let the consumers manage their Insurance policies with ease.
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