How Blockchain Is Helping Insurance To Evolve For Its Modern Consumers
Currently, insurers struggle with the inefficient exchange of information, complex liability assessments when it comes to reinsurance, fragmented data sources, the use of a middleman and a manual-driven claims review and process environment.
The Blockchain can change all that. Even when only used in the underwriting process, the Blockchain can help reduce costs, improve risk assessments and enhance client onboarding. It can also change the claims submission process from its registration through to assessment and payment. Having a simplified (and secure) environment to automate much of this, will radically reduce fraud and deliver a better customer experience.
Think of the Blockchain as a more sophisticated way of recording information in a database. Once added to the database (the Blockchain), the data cannot be removed or altered in any way. This essentially creates a verifiable, permanent record. Cryptocurrencies were, of course, the logical result of this new technology, but even so, the influence of the Blockchain extends so much further.
Two of the traditional challenges of the insurance industry — fraud and customer service — can be transformed with the Blockchain. Because Blockchain ensures records are not altered in any way and can be verified with complete accuracy, it provides significant opportunities for insurers to embrace the technology.
Because data stored in the Blockchain cannot be altered, it all but eliminates the potential for insurance fraud. No single element of the data can be modified in any way. And let us not forget the transactional capacity the technology unlocks. Suddenly, smart contracts become a reality where clients can digitally sign contracts directly with the insurer and claim payouts can happen virtually instantaneously thanks to cutting out the middleman.
From a consumer level, the Blockchain can help insurers understand and price risks better. By allowing customer, risk and policy information to be shared quickly and securely across multiple stakeholders in the insurance ecosystem, the revenue potential and growth prospects will improve by enabling insurers to price their products more accurately.
Blockchain provides insurers with an opportunity to grow in new, more innovative ways. However, they must act sooner rather than later if they are to keep up with the pace of change that has seen the growth of insurtechs in the market.
Fortunately, the Blockchain can scale effectively according to needs, so insurers can limit its roll out to best suit their business cases. With the Blockchain, insurers not only get an immutable audit trail but can do so faster, more securely and efficiently than ever. And that is critical for the connected customer today.