As the world progresses, newer technologies are being introduced to catch up to the demands of the people. In the last couple of years, after the Internet made its importance known, blockchain technology has been the next technology that has been mostly talked about. And why not? This technology is disruptive in its nature with secure, open means of conducting business transactions by people. This not only creates a level of transparency or security but also puts an element of trust that was not previously possible.
The three fundamentals that makes blockchain the most talked about technology are:
It is because of having these abilities, does this technology becomes able to maintain records of comprehensive asset, contract and data ownership without the need to have a physical possession of them. Simply put, it negates the involvement of a third party. If there is a scroll through of the insurance services industry, the usage of the blockchain technology would mean that the outcomes are more certain as there is almost no room for contract interpretation or hiding of any crucial information.
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The most important benefit of blockchain is that it helps in building trust between parties sharing information. As these informations are shared via encrypted records or blocks; they cannot be erased or changed without making a change to all the records. This ensures trust between users and if also the reason how it makes it possible for secure transactions between users.
To make it simpler, let us look into some of the ways blockchain can be implemented in insurance.
|Interoperable and comprehensive health records||The ability to add security and to establish trust between the parties are two of the reasons why this technology can help solve the interoperability problem far better than any existing technologies of today.|
|Administrative and strategic imperatives||Blockchain technology has the ability to automatically collect records of agreements, transactions, and other valuable information, to then link them together and act on the data by using smart contracts.|
|Detecting fraud effectively||If fraudulent information is ever submitted to a life or health insurer via false claims or falsified applications, the smart contracts will be able to help determine the nature of the submission; whether or not it is indeed valid.|
|Improving accuracy for provider directory||Unique provider directories can take advantage of the technology’s decentralized consensus protocols. They can allow providers and insurers to update the listings quicker and in a much easier way.|
|Client-centric application process||Blockchain can be used in insurance to provide an easier-to-access and a comprehensive set of medical records. Being decentralised, they can infuse comfort and peace of mind for the often discouraging application process.|
|Dynamic insurer/client relationship||Electronic health records on a smart contract helps in securely keeping the information of a wide variety of wellness-related behaviours into the insurer/client dynamic.|
Though the technology possesses a lot of potential for a better managed insurance policy for both the client and the insurer, the lack of familiarity of the technology in the insurance industry brings a few limitations as well.
Additional Read: How Blockchain is used in Healthcare
The insurance industry must establish a structure and incentives which will ensure a fair and positive outcomes for all stakeholders; if they are seeking to lead a new consortium or to build a network with their peers. The governance structures and technology stacks should be designed keeping in mind the long term effectiveness. Institutions that are exploring the blockchian space for insurance should build the technology that can help in scaling well and efficiently bring together small and large businesses behind a common set of interests.
The future of blockchain in insurance is yet to come as the space is still in its experimental stage. Smart contracts are a method that can be implemented in the insurance sector for a better execution of the technology.
What is the future of blockchain in insurance?
What is smart contracts insurance on a blockchain?
The future of blockchain in insurance is yet to come as the space is still in its experimental stage.
Smart contracts are a method that can be implemented in the insurance sector for a better execution of the technology.