Blockchain- An All Rounder Solution For The Insurance Industry
The Insurance Industry, having to deal with millions of claims also struggle to meet ends when a plethora of data redundancy and false claims jeopardize its smooth function. Sieving through duplicate data to reach the most important ones, remains a time-consuming process that delays payments and opens channels for human error. Besides, always having to check record history manually also hampers the workflow of the insurer.
To mitigate such challenges, the Insurance Industry is already leveraging Blockchain technology, which uses its DLT or Distributed Ledger Technology to inject transparency and trust within the Insurance framework. Linked using cryptography, Blockchain is a growing list of transactional records which are stored with a timestamp for each transaction. Decentralized in nature, the data on the Blockchain network is immutable, meaning it cannot be tampered with. Here discussed, are some of the aspects of Blockchain Technology which would elevate the efficiency of the Insurance Industry.
Smart Contracts facilitate smooth functioning in the Insurance Industry, which is seeing a rise in personalized contracts. Smart Contracts let the Insurance Company save a ton of money and time while enriching the customer experience. Smart Contracts creates a flawless connection between real-time information from multiple systems that involve physical documents. It obligatory triggers processes like reimbursements, claims, and payments with high accuracy.
Blockchain and Big data
Insurance companies are exposed to a lot of data that are a direct cause of many devices which generate numerous customer information every day. To sort through the data is a real challenge for policy managers. Large amounts of data, on the other hand, can be monetized, managed or shared through Blockchain. The Blockchain is able to store data without a central authority controlling it. Besides, it can also store static records that can be viewed by all the parties involved. Using a date and time stamp, Blockchain creates a digital fingerprint that lends both transparency and security to the streamlined data.
Blockchain Provides Security
Blockchain technology would eliminate duplicate transactions and suspicious transaction initiations by the use of the public ledger, which logs in each transaction. The decentralized digital repository that Blockchain boasts helps to verify the authenticity of policies, customers, and transactions by validating data with a database of historical records. This constant data validation prevents hackers from corrupting and stealing files.
Handling Third Party Transaction
Blockchain mainly helps to reduce the cost of administration through the automated verification process. It can automatically validate and verify payments and claims from the third parties, which are made through digital devices. This process enables the Insurance Company to quickly have a glance at the past transaction records and claims payments. By having an explicit reference of past transactions, it is easier for the insurer and customer to be tied by a relationship of trust and transparency.
Blockchain provides accurate reserve calculations depending on currency contracts, which can significantly uplift the framework of the reinsurance world. Presenting an array of benefits for property and casualty insurers, it keeps the insurers updated about the availability of money. Rebalancing the exposure against specific risks is mandatory which is reinforced by Blockchain to restore confidence within the Insurance Industry.
Insurance Companies such as Zurich, Munich Re, Aegon, Allianz, and Swiss Re have already started investing in Blockchain to yield the benefits through the B3i initiative. Blockchain technology lets the Insurance Industry indulge in better service for clients that are presented in a faster, more accurate and transparent manner.