Insurance, one of the most ancient of trades as well as one of the largest industries worldwide at present, has been, by far, left untouched by major technological disruptions. But the times are changing. Insurtech, a big buzzword in the industry, refers to the use of technology innovations geared towards improved efficiency and reduced cost. Blockchain, with it’s potential to simplify the insurance model while increasing trust and transparency at the same time, has a powerful role to play in the future of insurance.
The long overdue innovations in Insurance seem to be finally happening to go by the current trends. Back in April 2018, major health care companies like Humana, MultiPlan, Quest Diagnostics, Optum, and United Healthcare announced their plans of implementing a pilot program using blockchain technology to keep their healthcare provider directories up to date. Provider data forms an important part of a healthcare system. If the provider data is inaccurate or not up to date it can cause consumer dissatisfaction, increased healthcare costs and lawsuits. In India, some large insurers have kick-started a blockchain project to control costs required to run medical tests and also to ensure the privacy of the individuals. After showing a massive potential to change the landscape of the financial industry in bygone years, 2018 could be the year where blockchain make inroads in the Insurance industry.
Blockchain helps address some of the typical pain points faced by the Insurance industry. In Healthcare insurance, for example, there are issues faced by both insurers and the consumers which can be mitigated using blockchain.
Pain Points for Health Insurance Providers:
- Building trust: Insurance customers, usually left confused by the policies, have become increasingly wary of the insurance providers with growing distrust. This problem of trust is a major issue plaguing the insurance providers.
- Silos: The entire insurance industry operates between various disparate stakeholders like regulators, insurance companies, tax authorities, policyholders, credit agencies, doctors, and hospitals. All these service providers operate in their own silos and sharing information among them becomes cumbersome due to factors like bureaucracy or limits to information sharing.
- Patient data management: Most of the times insurance providers do not have access to the entire information about the patient which leads to increased processing costs or assigning faulty policies.
- Improper documentation: Again due to dispersed documentation and filings among the various stakeholders in the insurance network, documents are sometimes wrongly filled or not filed, and sometimes lost.
Pain Points for Health Insurance Consumers:
- Access to a medical history of the patient as per need and ownership of medical data: This happens often when the consumer changes the plan/insurance provider/doctor. This scenario can even happen when the customer has been on the same plan for many years and the data is distributed in far-flung corners of the insurance network. The patient data is owned by the various providers rather than by the patient themselves. The end user has little to no control over their own medical data/history. So during an emergency/ even during routine checkups; the patient data will not be readily available to a different doctor/hospital without undergoing a cumbersome process to gain access to the information. In this scenario, the doctors providing the services to the patients will not have a complete view of the patient’s medical history leading to repetitive tests or incorrect diagnosis or protracted diagnosis.
- Processing/denying claims within a specified time period: Insurance companies bungling up on claims beyond their deadlines leads to customer dissatisfaction. This, in turn, is again linked to the major issue of losing customer’s trust.
- Security: Consumer identity information stored with the hospitals/insurance providers make it vulnerable to leaks and identity theft.
If we look closely at the complications mentioned above it all comes down to four important areas — ownership of data by the consumer, better data access and maintenance, proper documentation and prompt transactions.
Blockchain can resolve all these problems. The foundational features of blockchain like accessibility, data integrity, immutability, automated execution of transactions and being a distributed ledger among all the peers in a blockchain network make it the perfect candidate for resolving these issues. Deploying blockchain on healthcare network would help with the following points.
- Expedite and improve patient diagnosis and medical costs. The patient owns his/her medical information and has the rights to provide it as per needs without relying on any other external agency. As the hospitals and doctors would have access to the patient’s data quickly and completely; the need for extra tests and prolonged or wrong diagnosis would drastically reduce. Thereby improving the customer experience.
- Smart contracts would automatically trigger transactions which would again make the processing and denying claims easier and faster. This would immensely improve the trust factor in Insurance providers.
- Sharing of data among the various providers in the network on a distributed ledger would ensure the data can be accessed easily anytime and also the risk of improper documentation and loss of data/documentation would come down to almost zero. Here this would help reduce the processing costs for the insurance companies.
- Self-Sovereign identity where the identity information is with the consumer and not on a centralized database can thwart potential identity thefts.
The acceptance of blockchain among insurance companies across the globe opens a lot of opportunities for validations services for distributed ledger technologies. Any implementation of blockchain would involve rigorous testing of the data integrity and synchronization among the peers, accessibility testing, load testing, testing of smart contracts functionality and testing of transaction execution. To fulfill the potential demand for Blockchain testing in near future, Inmediate has partnered with several insurance companies like AIG, FWD, and MSIG to eventually harness the full potential of blockchain powered insurance contracts and help customers buy the right insurance like healthcare for the right price, allowing them to save greatly on insurance products.