XenonStack Recommends

Subscription

XenonStack White Arrow

Thanks for submitting the form.

What is Blockchain?

With the increase in uncertainty of human life and property, people are doing insurance for all-important living beings. In the current scenario, blockchain also helps the insurance industry grow more efficiently.

Blockchain is a distributed database. It shares among the nodes of a computer network as a database. It stores information electronically in digital formats. Blockchain guarantees the fidelity and security of the data record and generates trust without the need for a trusted third party. Data is stored in blocks, and all blocks are encrypted. Peer-to-peer networks are used to manage blockchain. Once data is stored in the blockchain, it is impossible to change. Blockchain is an immutable ledger.

Blockchain Technology aims at removing this third-party involvement and keeping the transactions only limited to the sender and the receiver. Click to explore about our, Decentralized Applications on BlockChain

In reality, the insurance industry is mostly based on paperwork that causes fraud and is time-consuming. Due to paperwork, sometimes the customer's important information loses, which causes the customer problems. Considering blockchain technology in the insurance industry, customer information will save also. Once a customer's record is saved in blockchain, no one will be able to change the customer record.

Blockchain effects on the insurance industry

The insurance industry and customers are affected due to fraud insurance reports and fraud insurance accounts for property and casualty losses. That's why insurance applies many strict rules and regulations. Blockchain can be an option to solve such problems. Though blockchain can be an option for solving the fraud insurance reports and accounts-related issues, insurance companies and the government, till now, don't legalize blockchain. Till now, in the insurance industry, paperwork performs, causing time consumption also money consumption. With the help of blockchain, time and money will save. And insurance industry deals with sensitive cases like life insurance, casualty insurance, etc., where the customer's data security is a major issue. And blockchain helps to solve such problems; once blockchain data is stored, data can't be changed by others.

  • Payment verification, like financial transactions such as claim collection or payment process, will be faster and more accurate.
  • Also, reduce regulatory oversights of insurers and the associated costs.
Data analytics create new capabilities that empower insurers to optimize every function in the insurance value chain. Click to explore about our, Data Analytics in Insurance Industry

Benefits of Blockchain Technology in Insurance industry

  • Enhances Efficiency: The insurance Industry performs much paperwork. Those papers works are time-consuming. Blockchain technology can complete these tasks faster.
  • Increases Trust: Blockchain also ensures security and stores data in an encrypted format; once data is stored in ledgers, changes are impossible.
  • Claims Processing: Blockchain enables real-time data collection and analysis.
  • Smart contracts: These programs contain the user's contact information and contain logic. When that logic meets, then automatically, it's triggered.

Limitation of Blockchain Technology in Insurance industry

  • Prone to cyber attacks: The blockchain market is highly rich. With the time more people join blockchain technology possibility of cyber attacks increases.
  • Loss of integrity of data: The integrity of data must consider the validity of every transaction. It can break data integrity. It is necessary to ensure data feudality and maintain data integrity.
  • Cost of operations: With time blockchain is going to be more popular that's why it is very hard for all insurance companies to adopt this new technology.
  • Blockchain privacy: In cryptocurrency, blockchain is publicly available. That's why anyone can access the block. Though they cannot change the block, they can know every information. Big threat of this technology.
Machine learning models helps Insurance providers to predict the customer's claims and satisfaction status. Click to explore about our, ML model for Insurance Claim Prediction

Use Cases of Blockchain in Insurance

The use cases of blockchain in insurance industry are listed below:

Registries of high-value items and warranties

Blockchain is immutable and trustworthy. It will improve the organization's workability. It can track product ownership and claims in real-time and even across borders. Blockchain can enhance industry-wise efforts to migrate claims and fraud through superior data and data sharing.

Know-your-customer (KYC) and Anti-Money Laundering (AML) procedures

A tamper-proof repository can establish with blockchain, and also possible to share customers' information with organizations. It will reduce the risks of error, solve data duplication problems, increase customer visibility and save time and resources.

Blockchain impacts on parametric insurance

In parametric insurance, companies try to automate all processes with blockchain. Automatically all transactions will be complete with the help of blockchain. No human intervention will need. Blockchain technology will also deeply impact insurance-linked security, crop insurance, flight delay, and cancellation insurance.

Blockchain impacts reinsurance

Blockchain can allow insurers, brokers, and regulators to share data in real-time. Automate risk modeling, audit, and compliance checking. Bind towers of risk and treats on single timestamped smart contacts.

Blockchain impact on the distribution of insurance

Blockchain can coordinate the action of multiple parties at a low cost in a marketplace. Making transactions for paying premiums or claims fast, easy, and cheaper will be possible. Blockchain can give the facility of managing various policies on the same platform.

RPA has a lot of opportunities in the insurance business because it can automate a lot of operations.Click to explore about our, RPA in Insurance Industry Benefits

Blockchain impact on peer-to-peer insurance

Blockchain will enhance existing peer-to-peer models by automating tasks and holding funds in escrow on smart contacts.

Reduce Administrative Cost

Blockchain helps automated verification of policyholder identity, contract validity, auditable registration of claims, and data from third parties. It can increase transparency also. Blockchain can remove 15 % to 25 % of expenses.

Property and casualty insurance

Property and casualty insurance primarily consists of auto, commercial, and home insurance. The process required manual entry, giving a chance of human error. Blockchain can solve this problem by using shared ledgers and smart contracts to issue new policies or claim the existing policies and also will make the new policy issue or claim process faster, more efficient, and more cost-effective.

Fraud detection and risk prevention

The cost of insurance fraud increases per year. The outdated process of insurance leaves room for error and potential fraud. To combat this, insurance companies could store claims and ledgers that would help them communicate and help to understand suspicious behavior. Blockchain helps insurance process claims automatically.

Data Collection and secure storage

In Blockchain, data is stored in the block, and once data is stored in the blockchain, no one can change the data. With other technologies like Internet-of-things (IoT), and Artificial Intelligence (AI), Blockchain can collect various useful data. For example, from the health insurance, a company decides to give a low premium based on oxygen level, sleep time, etc. Data is collected by IoT and stored on the blockchain. Finally, the company will analyze the blockchain-stored data with AI and decide the insurance premium.

Conclusion

Blockchain is our future technology, as well as our present. Nowadays, cryptocurrency is used to stop fraud, prevent crime, and detect criminals. Cryptocurrency is an application of the blockchain. Many governments have announced cryptocurrency legal. To adopt everyone with blockchain, governments can take fruitful steps. Many insurance companies group and started working on blockchain. Blockchain is a new technology. In the upcoming future, blockchain technology is going to be the trend. With the benefits, blockchain technology has few risks that can be overcome with social awareness.

Thanks for submitting the form.

Thanks for submitting the form.