Blockchain technology may be arbitrarily associated with cryptocurrencies. However, blockchain technology has the potential to revolutionize the insurance industry as a decentralized digital record keeper, spanning multiple markets in some applications.
Blockchain technology and the insurance industry
Blockchain technology is poised to change the future of the insurance industry, primarily related to smart contracts and claims processing.
Reduced management costs
In the health insurance industry alone, administrative services account for up to 30% of annual costs. Administrative waste is a significant burden across the insurance industry.
Companies using blockchain technology can reduce overhead costs, customer service delays, and customer turnover by providing controlled access through self-running programs.
This will look like this:
Clients set up smart blockchain contracts to execute payments on invoices that meet key parameters. Representatives are not required to the same extent to complete contracts or follow up on automated execution programs.
How this helps reduce administration:
Insurance companies no longer need to deploy numerous adjusters and administrative personnel to respond to phone calls, emails, and facilitate visits to verify valid claims.
Faster claims processing
Insurance claims can take anywhere from a few days to several months to process, depending on the complexity of the claim. For example, Progressive shows average latency in most cases. Types of car insurance Billing takes a few weeks.
The contract between the insurance company and the insured could be stored on the blockchain with certain transactions programmed to be executed automatically after parameters are met.
This will look like this:
In the event of a travel delay, primary residence damage, or motor vehicle accident, insurance will automatically reimburse customers who submit a digital claim.
How this can help improve claims handling:
Clients don’t have to wait weeks or months after the fact to receive payment.
Fraud management
According to the FBI: insurance fraud costs $40 billion annually, does not include health insurance claims. This takes a significant toll on insurance overhead and requires increased security measures and personnel to monitor fraud.
This will look like this:
Blockchain technology could be used to set up a digital history related to fraud data that would be shared on a network between insurance companies.
How this helps with security:
Confidential and anonymous, insurance companies can, for example, look at claims databases to see a history of fraud associated with individual customers or businesses.
The Future of Blockchain Platforms: How to Share Data Securely
Blockchain platforms enable the insurance industry to securely collect, store, and share data. Blockchain acts as a shared database that stores information through encryption. These platforms are most commonly used as ledgers and are decentralized. This means that all users can manage a particular blockchain, rather than having it controlled by a single group or individual. This could potentially allow different formats of information to be stored digitally on the same blockchain and accessed by those who need it.
The health insurance industry relies on blockchain platforms to improve the security and accuracy of medical data. Medical data can be stored and accessed by multiple healthcare providers and customers in a confidential and secure environment.
medical chain
Medicalchain has started integrating blockchain-based platforms to store and share medical records in a confidential space that can be accessed through any network. These steps are critical because:
● Reduce indirect administrative costs and administrative waste,
● To make it easier for customers to submit claims;
● Enables tracking of important medical information.
● Share data between multiple healthcare providers.
BCBS
Blue Cross Blue Shield (BCBS) has already begun implementing digital solutions through blockchain technology through another partnership through the Coalesce Health Alliance. The company has started streamlining data exchange between BCBS partners using confidential blockchain technology.
The future of blockchain contracts: Streamlining billing
In addition to storing data securely, blockchain technology in the form of smart contracts can help streamline the billing process, especially when: car insurance and homeowners insurance Concerned.
Smart contracts are self-executing. That is, it can be programmed to initiate certain actions based on the fulfillment of predefined conditions.
For insurance companies, smart contracts can reduce costs and time associated with claims processing by automating the claims process. For example, if a car accident occurs, a smart contract can automatically process the refund rate of an insurance claim and release it to the policyholder once predefined parameters are applied.
Blockchain has the potential to store information such as:
● Photos
●Police report
●Accident report
● Receipt
● Inventory list
Once configured information is stored on the blockchain, it can be shared with authorized parties, reducing fraud by verifying authenticity and reducing the time it takes to access information and resolve claims. Masu.
Insurwave has begun integrating blockchain platforms into its billing process with great success.
road to the future
Overall, blockchain technology gives customers control over their insurance data, providing a centralized location that is not owned by a single insurance provider or company. This provides an opportunity to store your data safely and securely. As a side note, smart contracts work in conjunction with blockchain platforms to enable self-executing agreements that speed up the billing process.
Leveraging this new technology will transform the insurance industry by reducing administrative costs, accelerating claims processing time, and enhancing security and fraud controls.
