Is Blockchain Able To Provide A Memorable Customer Experience For Insurance Customers?
As the year advances, the insurance industry tends to focus on leveraging blockchain to prevent fraud, simplify processes and reduce costs.
But considering blockchain’s advantages when it comes to data integrity, record keeping, and security, we must not overlook its potential to fundamentally change and refine the insurance customer experience.
We all know that the insurance industry struggles with customer experience. Trust in insurance firms remains low, and customers don’t believe they can rely on their insurer when things go wrong. There is a lack of transparency. Instead of a streamlined, engaging experience, carrier often challenges their end-users with complex pricing, overwhelm them with a vast array of policy choices, frustrate them with opaque processes, and confuse them with incomprehensible contracts.
Due to this, Inmediate and many other insurtech startups like us think that blockchain can help with these challenges. Here are some of them:
Creating trust and transparency
Policyholders must be able to trust that their claims will be paid. If consumers continue to believe that insurers don’t pay claims, underinsurance will continue to be a problem.
Similarly, insurers need the ability to trust that their clients’ are not filing fraudulent claims. The layers of protocols insurers add to detect possible insurance fraud adds complexity for both for the insurer and the insured.
Blockchain can be applied to foster and create trust between the insurer and the insured. Also, by using this technology, we can design insurance contracts to cover situations that truly matter to our customers. We can offer simpler, more engaging contracts that people desire, understand and trust. And this is what we call a smart contract.
In a household setting, insurers can combine multiple data feeds from security cameras, risk data, telematics, smart sensors, connected devices, and other reliable external data sources to detect a loss event like a pipe bursting or wind damage to automatically trigger payment. As long as the data source is trustworthy, smart contracts could be implemented to trigger automatic claim payments.
Streamlined claims process
Another common customer pain point in insurance is the complex and lengthy claims process that typically involves multiple parties like an expert to assess the damage and a claims team to process and settle the claim. Blockchain’s distributed ledger feature can automate the claims process and eliminate the manual effort required to collect claims information and the lengthy submissions process. With blockchain, insurers can easily verify the authenticity of documents submitted by customers and third parties including evidence such as police reports, adjuster reports and images; relevant documents such as from a motor vehicle data and land registry; and claims forms. This would minimize disputes, improved fraud detection and improve speed. The claims process can be made transparent, efficient and accurate, thereby improving the overall customer experience.
In conclusion, we know that in some way or another, an insurance customer sometimes finds insurance to be boring, difficult to understand and unreliable. This is a fundamental challenge that insurers must address. We must offer simpler, more engaging contracts that people can understand and trust, and solve problems that matter to our customers.
This involves first building a better understanding our customer’s pain points, followed by an exploration of the advantages new technologies like blockchain can bring to address them. Otherwise, we will continue to miss opportunities to revolutionize the insurance customer experience.