Blockchain has till date proven to disrupt the technologies of today and position it notches higher. In the same way, this technology proves to be a bane in the insurance industry. Aiming to provide complete accountability, transparency and superior security, blockchain will boost time management and customer satisfaction. Sections where blockchain can influence the industry are alleviating paperwork, verification and handling claims, minimising fraud, improving the data quality for underwriting, improving efficiency across the insurance value chain.
Blockchain has the ability to eliminate errors and detect fraudulent activity. Integration of the technology can independently verify the authenticity of customers, policies and transactions (any claims) by providing a complete historical record.
A distributed ledger can enable the insurer and various third parties benefits like, easy access and updation of relevant information (e.g., claim forms, evidence, police reports). Blockchain systems can also facilitate communications and coordination among all parties.
Since manufacturing requires B2B communication, a single data breach can compromise the operations. Blockchain implementation can prevent leading to both minor & catastrophic system failures. To develop accurate actuarial models, new products such as “Usage-Based Insurance” models, the amount of data that will be created and collected by devices connected to IOT will be huge. Blockchain will help manage large, complex networks by having devices communicate and manage each other on a peer to peer basis securely, instead of developing a data center to handle the processing and storage load, making it cost efficient.
To achieve capital efficiencies through single global ledgers, insurers can use blockchain to cut asset management costs by reducing the fees paid for currency fluctuations in international transactions. With the integration of blockchain, identities and insurance information can be availed instantly by consumers on wallets increasing consumer engagement with tailored functionalities and integrated data.
A blockchain ledger can provide accurate reserve calculations based on current contracts. This will help P&C insurers know how much money is available as they pay their claims.