The blockchain is going to be a way for insurance companies to reduce costs massively. We have spoken with a number of insurance companies that are beta testing blockchain solutions to verify insurance claims. This cuts out a huge administrative cost for insurance companies.
Blockchain in insurance, like blockchain technology itself, is in its infancy, but on the peak of rapid expansion. Insurance companies that see the potential and are proactive in its adoption will likely be the frontrunners in innovation and ahead of the curve when the benefits are fully realized. There is an opportunity for efficiencies in transparency and cost-cutting, and a few high-profile applications are taking hold. When the regulatory landscape evolves with the technology, more insurance companies will likely follow.
How blockchain can help the insurance industry
- Fraud detection and privacy will likely be the biggest trend/benefit. By tracking claims onto a blockchain, it can eliminate many of the common areas of fraud and allow companies to detect trends in claims. Furthermore, medical records would benefit significantly from a blockchain, where the provider can share secured files much easier.
- Risk prevention: With blockchain, companies can avoid common sources of fraud by moving insurance claims onto an immutable ledger. Blockchain smart contracts can turn paper-based contracts into programmable code that helps automate claims processing and calculates liabilities in insurance for all players involved.
Reinsurance: With blockchain smart contracts, reinsurance contracts can be secure and protected simplifying the flow of payments transactions between reinsurers and insurers.
Health insurance- With the blockchain, health providers can share medical records that are cryptographically secured between each other increasing interoperability in the health insurance ecosystem.Blockchain has the potential to eliminate errors and detect fraudulent activity in the insurance ecosystem.
- Blockchain establishes an efficient, transparent and customer-focused claims model based on higher degrees of trust.
- Blockchain provides more efficient data sharing and stronger safeguards against fraud.
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