The Role of Blockchain in Insurtech

CIO Applications| Tuesday, March 16, 2021

Insurance companies are now using blockchain technology to save time, increase transparency, avoid fraud, comply with legislation, and create better products and markets.

Fremont, CA: The insurance industry is plagued by a slew of organizational inefficiencies, including difficult claims processing, a mountain of paperwork that leads to poor customer service, and fraud.

Insurance companies are now using blockchain technology to save time, increase transparency, avoid fraud, comply with legislation, and create better products and markets.

Here are two use cases of blockchain in the insurtech industry:

Claim Management

Utilizing blockchain is one efficient way to ensure that claim submission and processing are as safe, easy, and consumer-friendly as possible.

Blockchain has the ability to merge several data points from different sources in a seamless manner (based on the location and analytics). This will result in a significant reduction in the number of false statements.

Insurance firms may use a distributed blockchain database, which is in charge of transmitting multiple sources of data and records. This can include third-party analyses, evidence from the scene, and police comments, among other things.

Peer-to-Peer Insurance

P2P Insurance (Peer-to-Peer Insurance) has been in use for quite some time. Blockchain technology, on the other hand, is inspiring insurers to accept it wholeheartedly.

One of the primary duties of insurance firms is to develop smart contracts that will promote the ease of damage compensation due to bad weather conditions that may damage assets.

These contracts are created using various metrics, such as weather readings and sensor data, as necessary. The intention is to make these statements more objective and trustworthy.

Smart contracts are now entirely used in peer-to-peer insurance marketplaces, making them truly "smart." This has been made possible by blockchain, which ensures that policyholders will receive higher premiums for these specific types of insurance companies instead of standard insurance contracts.