The last decade was full of technological innovations that aimed to improve our daily lives. The multi-trillion-dollar global vehicle insurance industry is not exempted from technological advancements. One case in point is the involvement of blockchain in the motor insurance sector. With blockchain automotive and insurance solutions, vehicle insurance companies can secure all insurance-related information with cryptography, decentralization, immutability, and other blockchain-powered attributes. With blockchain, they can build fool-proof record-keeping solutions that enable efficiency, reduce costs, and enhance the customer experience. Let deep dive into blockchain’s applications in the vehicle insurance industry.
Essentially, blockchain is a peer-to-peer distributed ledger across several nodes. The ledger records transactions and the associated information in ‘blocks’ which are practically unalterable. Each block contains a time and date stamp and is connected to the previous block. That’s how we call it ‘blockchain technology’. In addition, it does not require middlemen to manage the blockchain network, unlike centralized database networks. Thus and so, we can find far-reaching implications of blockchain technology that can impact diverse business sectors across the globe.
When we buy a car, we consider various factors like mileage, comfort, power, etc., which sway our decision. Similarly, vehicle insurance companies also take various factors into account to calculate premiums and offer claim coverage. Often, car owners and dealers try to present a car in the most flawless way possible. It compels insurance companies to make random speculations, resulting in false, inaccurate, and fraudulent claims. Blockchain insurance solutions can eliminate this guesswork from the equation. It is because they can assist insurance companies to establish a reliant, robust, and efficient vehicle evaluation system. Consequently, the insurance companies can properly document all repairs done in a vehicle and share it with all respective stakeholders.
Making an insurance claim, whether healthcare or motor, is always a cumbersome and time-consuming task. Blockchain provides solutions to make the information flow more secure, transparent, and uniform, which ensures that every stakeholder involved in the process remain on the same page. Here’s a compact guide to understanding how blockchain simplifies claims processing while reducing cost and time and accelerating reimbursements.
Insurance companies can also automate the payment process through a blockchain smart contract solution. Contrary to traditional contracts, blockchain smart contracts enable computers to automatically regulate the ownership, management, and operations of a contract.
When a transaction is carried out through a Blockchain platform, it is done through a smart contract. A smart contract is different from a traditional platform as it allows computers to regulate the ownership, management, and operation of a contract. Put simply, with blockchain, smart contracts ensure transparency, automation, and efficiency in payments and other contractual requirements. As we know, blockchain is a decentralized distributed ledger that requires no intermediaries, smart contracts can minimize mistrust between stakeholders and eliminate the need for a third-party authenticator like banks, register, notaries, etc.
The adoption of blockchain technology by vehicle insurance companies can foster several other types of insurance as well, including healthcare, travel, and more. In the vehicle insurance sector’s operations like claims processing, blockchain can prove to be a game-changing technology. Connect with our blockchain technology experts for a detailed consultation on how blockchain can optimize the vehicle insurance process.