Blockchain Applications in the Insurance Sector

The blockchain technology is rapidly gaining significant traction in the insurance industry. It is enabling new financial services infrastructure and services by providing the platform to create simplicity and efficiency. In this article, we explore the potential of blockchain application development in the insurance sector.

What is Blockchain

Blockchain is a digital ledger shared among different stakeholders, which records events in a distributed and immutable manner. It requires the consensus of the participants to make alterations to recorded transactions in the database.

Nobody can erase the information once stored on the blockchain. It contains a verifiable record of every transaction ever made on the ledger. 

Suggested Read | The Potential of Blockchain Technology in Telemedicine

How Does it Affect the Insurance Sector

Indeed, blockchain can evolve the role of financial institutions by establishing decentralization. It can enable businesses to save costs on value transfer between two or more parties. Eventually, it can assist organizations in meeting customers’ increasing expectations set by key players with fast but costly services. 

Prevailing Pain Points in the Industry

Blockchain-powered insurance operations and business models can resolve multiple complexities prevalent across the insurance industry. 

• Insecure, costly, and inefficient information sharing and exchange
• Fraud-prone operations and processes due to multiple points of failure
• Opaque and complex assessments of liability for syndicate and reinsurance
• Several intermediary authenticators and intermediary involvement
• Unstructured and fragmented sources of data
• Manual, paper-based claims processing 

Also, Discover | A Definitive Guide to Exploring Blockchain In Insurance

The Impact of Blockchain on Industry Processes

At Oodles, our team of blockchain experts suggests that the following processes are the most dominant areas to apply the technology. We are a blockchain development company that provides solutions primarily for these use cases.

Underwriting

The implementation of blockchain in the underwriting process can assist institutions to improve risk assessment and enhance client onboarding. 

Assessing Risk 

Blockchain records transactions in a shared and immutable manner. It ensures the trust and verifiability of information, from its provenance. Essentially, it provides transparency on existing or past insurance policies and claims associated with insurees or property.

Besides, it provides institutions and trusted third-party data providers, like notary services, a shared interface that ensures security with compliance.

Quoting

Blockchain smart contracts assist in improving the accuracy of insurance quoting through transparent assessment of risk and elimination of third parties. They also provide capabilities to automatically manage obligations and terms that bind insurees and insurers.

Onboarding

Blockchain provides a means to capture immutable, trusted, and verifiable information through digital cryptography. It means insurers can rest assured of insurees’ identity and other risk profiling details. Besides, it provides fast, efficient, and frictionless experience in binding policies to insurers.

Check It Out | Blockchain in Insurance | A Transparent Enabler for Efficiency

Summing Up

Indeed, blockchain solutions can provide several benefits including efficient information exchange, improved risk profiling, and automation of policy through smart contracts. If you are interested in tapping into the potential of blockchain development in the insurance sector, then connect with our blockchain developers.