How Blockchain Technology Renovates the Insurance Sectors ?
Each and every technology brings a new change over in any kind of businesses or industries. When we look at the list of industries that are disrupted due to the implementation of technologies, Insurance Industry stands first in the list. There may be many technologies that transform the insurance industry, but Blockchain Technology proves to make a notable transformation in the Insurance Industry.
Here let us look over the transformation of the Insurance industry by Blockchain and how blockchain is helping the insurance industry to face the challenges.
Insurance and Types :
Insurance is nothing but protection from uncertain financial losses. To hedge against the risk of uncertain losses, a form of risk management is practiced which is known as Insurance Policy. A firm or an individual who provides insurance is known as the insurer/insurance company/insurance carrier/underwriter. A person/group who buys insurance is called an insured/policyholder.
There are many types of insurance, but basically, an individual needs the following insurance like,
1. Health Insurance - An insurance policy which ensures you to get cashless treatment/expense reimbursement, in case of health issues.
2. Auto Insurance - An insurance purchased by automobile owners to mitigate costs associated with getting into a vehicle accident.
3. Title Insurance - An insurance which protects insureds against claims for past occurrences.
4 . Life Insurance - An insurance in which the insurer promises to pay a beneficiary amount money on the death of policy holder.
Types of insurance are a vast concept to coverup completely, but we are sure that we have described the major types of insurance. Now, let us have a look at the major challenges faced by insurance industries.
Challenges In Insurance Industry :
The major challenges that the insurance sectors face in recent days are as follows :
1. The limited growth in markets for insurance sectors.
2 . Involvement of fraudulent claims activities .
3.Occurance of third party payments and transactions.
4 . Difficulties in handling vast amounts of data .
There are a lot more challenges in insurance sectors and the above mentioned major challenges can be overcome by Blockchain Technology.
Blockchain - A key to escape out of these Challenges
Blockchain in insurance sector can help to kickout most of the issues in insurance sectors and make it work effectively. Now let us look how blockchain rescue insurance industry from fundamental issues like stability and less trust.
Blockchain in insurance can provide trust, stability, and transparency of data which creates trustworthiness in insurance sectors among people.
As blockchain uses public ledger which can resist duplicate transactions by monitoring each transaction. With the decentralized digital system, blockchain can verify the authentication of customers, policies, and transactions by maintaining historical records. It creates complexity for hackers to steal data.
Smart Contracts :
The personalized smart contracts in insurance industry replace physical paper documents and activities by smart contracts that connects real-time records. This easily initiates claims and payments with high accuracy which in turns reduce money and time.
Third - Party Transaction :
Blockchain reduces the number of third-party transactions, claims, and administrative costs. Blockchain helps for automated verification of claims and payment details from the third party. With the use of blockchain, all insurance companies can easily retrieve past claims and transactions that are recorded. This furnishes trust among insurer and policyholder.
Big Data :
Blockchain can store, manage and share a large amount of data. The use of blockchain can store a large amount of static data /records without a central authority and the data can be viewed by all individuals connected in the blockchain. This kind of streamlined records can make transactions more accurate and risk assessment.
Blockchain can provide accurate reserve calculation details on currently processing contracts, in insurance companies. This will be so useful for P& C insurers who are in need of information about how much money is available as they pay claims. Thus Blockchain prevents them from specific risks.
Lot more benefits of using blockchain in Insurance Sector :
1. The process can be simplified with improved efficiency.
2. Reduces turn around time for the process of the claim.
3. Provides improved risk management.
4. Increases trust by providing high security for records.
5. Less or no fraudulence activities occurrence.
6. Improves KYC Compliance ( Know-Your- Customers).
7. Furnishes better claims and policy experiences.
Blockchain : The Future Of Insurance, BIg Data, & IOT
Insurance Sectors that uses Blockchain :
Now, let us have a look at some insurance companies that adopt the use of blockchain which makes them survive stronger.
1. Kasko2Go - An automotive insurance company uses DLT ( Blockchain ) for eliminating most of the red tape that surrounds auto insurance.
2. FidentiaX - Life insurance company using blockchain to streamline their insurance procedure.
3. Etherisc - With combines use of blockchain and big data analytics, Etherisc helps to protect most common investments in the globe: plane tickets.
There are many other insurance firms which use blockchain technology and BI for facing complexities and issues.
Future Scope :
Everyone will expect for a more open and a transparent Insurance Sector. This can be made possible with the use of blockchain technology. This shows that Blockchain holds the key to the future of the Insurance Industry. Let us hope the transformation of all insurance companies as secured and fast working with the use of blockchain technology.
How Bitdeal can Support?
Bitdeal - Best Blockchain Development Company works on blockchain development for all industries at affordable costs. We develop blockchain for any kind of insurance companies with unique features and functionalities. Our experts can dedicatedly develop and deploy you the best blockchain for your insurance firm on time.