Blockchain is one of the most powerful technological forces, attracting individuals and businesses from all walks of life. That’s precisely why everyone is talking about the Blockchain. Just like many other industries, Blockchain has revolutionized the Insurance sector by inducing transparency between insurance providers and holders on top of eliminating the need for an intermediary or middleman. If you are not aware of the Blockchain, it's time to enlighten you on what this technology is all about.
So, basically, Blockchain is a decentralized, public, and unchangeable database that enables real-time transaction processing and tracking across a network of enterprises. The application of Blockchain technology is not restricted to monetary transactions and cryptocurrency only; in fact, it can also be used to track actual assets, including tangible assets like real estate, automobiles, and insurance, as well as intangible assets like copyrights, voting records, and certifications.
The beauty of Blockchain technology is that it allows a transaction/record to be added to the database only after the consensus of all the nodes in the network, and once it's in the database, it cannot be altered. Thanks to its transparency and security, many insurance companies have started adopting Blockchain at a rapid pace in the USA and Europe. In this article, we are going to explain how Blockchain technology has revolutionized the insurance sector on top of discussing its benefits and use cases. So, without further ado, let's dive into it!
Benefits of Blockchain in the Insurance Sector
The insurance sector, in every nation, includes risk-taking companies that offer financial services to people and organizations. They take up the risk by proposing guaranteed payments or contracts for the financial undertaking of your unlikely prospective project. There have been a lot of cases related to fraud, false claims, and contract violations throughout the world in the insurance sector. Before Blockchain, there was no definite way to address these issues. However, the introduction of Blockchain in the insurance sector has changed it all. The essence of using Blockchain technology in insurance companies comprises the following benefits:
1- Blocks False Insurance Claims
Insurance companies that use a Blockchain network can handily identify users with phony identities and statements. Basically, it enables the insurance company to observe their customers by recording all business transactions on a shared ledger that both parties can access. This helps them to validate the claims made by customers by assessing the historical record of the customer's past fraudulent activities and resolving such errors beforehand. With Blockchain technology, insurance companies can single-handedly work with those businesses or individuals that assert valid claims and credible records.
2- Reduces Administrative Costs Through the Automated Verification
Unlike the manual way of recording business transactions using paperwork, the Blockchain network is faster and more money efficient when it comes to filing reports of the company's transactions. Basically, the Blockchain network allows insurance companies to automatically verify the identity of a customer, the facts of the contract, the registration of the statement/claim, and data from a third party. Most importantly, it stores your data, manages it, and allows you to share your information with permitted users on the ledger. All this makes the filing processes easier with Blockchain as it automates claims and reduces operational expenses of the insurance company.
3- Innovation for Digitally Savvy Customers
The world is moving towards complete digitization. With growing interest in digital solutions, customers also expect innovative offerings from insurers. Gone are the days of outdated insurance policies and procedures that do not correspond to the technological advances of this era. Today, the customers are digitally intelligent. Hence, they appreciate using innovative technology like Blockchain for their daily transactions with an insurance company. Most importantly, using Blockchain in the insurance sector enables insurance companies to provide 24hrs innovative financial services to the customers without meeting them in person or with minimal physical appointments.
4- Enables Enhanced Customer Experience
Blockchain is a transparent technology in which any user can join the network and access all data on it. As a result, using Blockchain in the insurance sector allows customers to encounter a fresh take on any transaction with an insurance company more smoothly. Moreover, it enforces complete transparency between all parties involved in a claim using a fully auditable and valid ledger of transactions. Most importantly, Blockchain technology allows you to transfer value without a facilitator, maintain control over your records, and protect your sensitive data from any cyber authority. All these features enable Blockchain to elevate the overall customer experience in the insurance sector.
5- Builds Transparency Between Insurance Providers & Holders
As already stated, the Blockchain is transparent because anyone who joins the network can access all stored data on that network without difficulty. Most importantly, no user on the Blockchain can corrupt its system or modify its data. Hence, using Blockchain in the insurance sector builds trust between an insurance company and its holders.
With the transparency that comes with Blockchain, users can rest assured of having less expensive administrative processes and a more efficient working system. Another great thing about Blockchain is that it helps users record price, date, location, quality, certification, and other necessary information that can help them create an effective supply chain. The accessibility of this information within the Blockchain network enables users to trace any claims made on the platform, making the overall customer experience smooth and easy.
How Can Insurance Company Use Blockchain?
Insurance companies can use the Blockchain technology in the following ways:
1- Medical Insurance
Blockchain in the Health sector creates a user-friendly and user-oriented ecosystem that enables users on the network to maintain their health or patient records, such as prescription scripts. It improves your integrity and dignity by providing better supervision of your hospital records. Moreover, it accurately optimizes interactions between healthcare professionals, insurance companies, and policyholders. Also, you can easily track insurance claims with the help of Blockchain on top of getting assistance in processing medical claims on the network.
2- Property Insurance
Property insurance includes residential and commercial building insurance, car insurance, etc. Premiums paid in this kind of insurance are usually high and would require a Blockchain network to organize their data. The Blockchain helps create smart contracts that make statement handling more accurate and productive.
In property insurance, Blockchain enables users to share secured data, streamline rental collections and payments to house owners, and offer premiums after financial investigation across the network. This feature further enhances functional efficiency on the platform and enables you to save both time and money. Most importantly, Blockchain enables insurance companies to verify the true ownership of tangible as well as intangible assets.
3- Title Insurance
The Blockchain network has made the title insurance processes easy by providing immutable records of these title deeds and securing them from any possible hacker on the web. If any user tries hacking into the Blockchain space, any altering of the ledger would automatically reflect on the screen. Another advantage of using Blockchain in title insurance is that there is no manual paperwork or complex transaction on the platform. Instead, it uses e-contracts that can meet expectations with just a few clicks.
4- Travel Insurance
Travel insurance companies use the Blockchain to store travel records, like purchased air receipts, on the digital ledger. This helps insurers offer quicker services in terms of flight cancellations or delays. Storing your travel details on Blockchain allows you to automatically get paid for any unexpected traveling obstacles. Traditional travel insurance policies are usually slow and tedious to process a complaint. However, with Blockchain technology, you can rest assured of getting paid in no time because you have your flight details already recorded.
Future of Blockchain in the Insurance sector
Blockchain is a futuristic technology that is revolutionizing the way businesses conduct their day-to-day activities. It has made insurance processes and programs clearer and quicker to use. Blockchain technology is a peer-to-peer machine that operates on a decentralized ledger. This digital ledger records premiums paid by each insured along with other applicable information about the trade. For this reason, the insurance holder has the honor to choose and further decide upon a final claim agreement when a claim has begun. All this makes the process transparent and incredibly effective with a well-secured premium collection, administration, and claim payment.
Moreover, Blockchain has created an immutable storage system for every information or data in the insurance sector by delivering a digital ledger that records deals and trades between the insurance company and its holder. The Blockchain network enables more secure and traceable data records than traditional centralized storage systems. You can check our detailed article on the Benefits of Decentralized Storage Systems to get a better idea about this.
With Blockchain, insurance companies can use smart contracts that enable insurers and holders to access information in a flexible and smooth online space. Most importantly, users can transfer finances on the Blockchain using its electronic cash system, which runs faster than other payment approaches.
All in all, Blockchain is already running riots in the insurance sector, and it will continue to expand as more insurance companies adopt this technology. Moreover, the Blockchain industry is experiencing continuous growth and development. This means Blockchain will keep on offering new and more exciting features in the future. Considering this, it's possible that Blockchain will change the entire business model of insurance companies in the near future.
In conclusion, Blockchain has shown capable abilities to transform and improve the way business transactions operate in the insurance sector. That’s precisely why insurance companies are willingly accepting Blockchain technology to improve their customers' experience and ensure operational productivity. If you are operating in the insurance sector and still haven't incorporated Blockchain into your business, it's high time you take the initiative and adopt this technology before your competitors leave you behind. This is where we can help.
Here at IIInigence, we stand proud as the best Blockchain Development agency in the USA, offering a wide range of services, including Blockchain consultancy as well as cryptocurrency, smart contract, dApp, Decentralized Marketplace, and Metaverse development. We have been into Blockchain development for 10 years, and we have successfully completed several massive projects in diverse sectors, including insurance, real estate, gaming, etc. You can check out our portfolio and testimonials to get a better idea of our expertise as well as the quality of our work. Simply contact us today, and schedule a call with one of our experts to see how we can help you fulfill your goals.