Blockchain technology has been changing the way we do business around the world, and the insurance industry is no exception. There are many advantages of blockchain in insurance sector, from more efficient administration to smarter settlements to offering improved coverage options to customers. Here are five ways blockchain technology can improve your business practices in this industry.
1. Blocks False Insurance Claims
With blockchain technology, record-keeping is far more straightforward. It’s incredibly hard to get away with fraud because each transaction is recorded onto a transparent ledger for all to see. This means claims can be processed quickly and accurately, helping save time and money for everyone involved.
2. Reduces Administrative Cost through the Automated Verification
As a decentralized, public, and distributed ledger, blockchain technology allows for verifiable and automated processing of business transactions. This feature reduces administrative costs and makes insurance claims processing faster. It’s not just applicable to car or health claims—the bulk of what insurers process on any given day is fairly routine, so it stands to reason that blockchain could streamline operations across all lines of business. In addition to cutting costs by eliminating paperwork and manual processes, applying smart contracts can also reduce fraud by disallowing bad actors from using maligned data.
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3. Innovating for Digitally Savvy Customers
Technologies like mobile devices, big data, and blockchain are making it easier for customers to manage their insurance needs themselves. In fact, as many as 41 percent of individuals prefer to take care of most or all of their insurance business online. These same technologies enable insurers to better anticipate what kinds of coverage and services consumers will want, giving them an edge over competitors who don’t keep up with technology trends.
4. Enables Enhanced Customer Experience
The use of blockchain technology and smart contracts allows insurers to directly communicate with customers by showing policy status, providing instant evidence of coverage, and creating new revenue streams from e-commerce transactions. For example, AIA Singapore offers a blockchain-enabled home insurance policy that allows users to manage their policy on their mobile devices by scanning QR codes on their homes. In addition, blockchain technology facilitates immediate claims settlement through automatic compensation using cryptocurrency (e.g., Ether), bypassing traditional slow-pay practices of insurers.
5. Builds Transparency Between Insurance Provider & Holder
It’s important to understand your policy and what you are entitled to. With blockchain technology, it is possible for insurance companies to put their agreements on public ledgers for both parties to see and audit. This builds trust between companies and consumers because there will be no disputes about what was agreed upon when. It’s transparent! Imagine not having any doubts or questions surrounding your insurance provider.
In conclusion, blockchain technology has numerous advantages over traditional database solutions. The encrypted and decentralized nature of blockchain will help immensely when it comes to preventing data loss, as well as by removing single points of failure. This, along with many other advantages offered by blockchain technology, makes it a valuable tool for insurance companies and others involved in financial services. If you’re looking to increase efficiency without compromising security or data integrity, then implementing blockchain technology is for you with the help of blockchain companies in India.