Blockchain technology is a growing trend in the insurance industry for 2018 and is slated to gain even more traction in 2019 and beyond.
It promises to improve operational efficiency throughout the value chain, enhance operational transparency and ensure seamless data transfer between all involved stakeholders.
Blockchain-based technological solutions have the potential to make the claim process seamless and hassle-free for dependents and beneficiaries by using inputs from death registries. It can also help life insurance companies reduce their operational costs by automating back-office transactions.
Of course, integrating this progressive technology into traditional existing workflows will be no mean feat. Insurance companies and startups working with blockchain technology will have to overcome significant regulatory and legal hurdles before anything transpires resembling industry-wide disruption. Skeptics will even point out that there are serious obstacles for blockchain technology in an industry that hasn’t even fully embraced the cloud.
It’s still a little too early to tell whether blockchain can overcome the legal and regulatory hurdles to become a default standard in the insurance industry. But the possibilities are endless, and insurance companies and startups alike are exploring insurance applications for the blockchain full-throttle.
Potential benefits on blockchain include:
• Fraud detection and risk prevention. By moving insurance claims onto an immutable ledger, blockchain can help eliminate common sources of fraud in the insurance industry.
• Property and casualty (P&C) insurance. A shared ledger and insurance policies executed through smart contracts can bring an order of magnitude improvement in efficiency to property and casualty insurance.
• Health insurance. Through the blockchain, medical records can be cryptographically secured and shared between health providers, increasing interoperability in the health insurance ecosystem.
• Reinsurance. By securing reinsurance contracts on the blockchain through smart contracts, the blockchain can simplify the flow of information and payments between insurers and reinsurers.
With so many applications, it is no wonder several insurance companies are already exploring the potential of blockchain technology.