In my previous post in the series – “Can Blockchain Power Insurance Domain”, I have elaborated two other potential markers that would require blokchain’s aid to make the insurance sector gain good traction on the data front. The markers described are purely related to the kind of data that would disrupt insurance sector and its capture and maintenance methods through blockchain and other technological advancements. However it doesn’t talk about how Blockchain can empower the operations and procedures involved directly in insurance proceedings. This last post would be completely dedicated to the same cause. Let’s look into how blockchain can transform the operating procedures of insurance domain:
Updated Distribution and Payment models:
Many global insurance providers are collaborating and developing alliances to identify new payment business models (like bitcoin and other cryptocurrencies),to efficiently handle data through a single global ledger. More efforts have been dedicated to increase automation to proactively capture risk data in contracts also offers new opportunities to build market knowledge. This in turn helps in streamlining payment methodologies suitable to the needs of the users. On top of that, at the least, Global insurers can cut down on the asset management costs, by reducing the hedging fees that they generally pay to protect themselves from the currency fluctuations that exposes them to risk in the international transactions.
Reinsurance has always been a hot topic in the insurance sector where, expiration of insurance period might require parties to renew their policy by manual process. For industries and for the insurance of automobiles, smart contracts can be designed that would diligently cut down the work that is put in by middle men in re-enabling the policy. Also when a particular insurer is seeking to offload an equal amount of risk to two separate insurers. A blockchain ledger can provide insight and notification if one of those reinsurers then tried to offload some of its portion to a subsidiary of the other reinsurer.
Hence we see that from detection of fraud claims to stream lining the data for exploratory analysis, Blockchain also weighs good on the process optimization front of insurance sector and has true potential to power it in the time to come.