Decentralization is a powerful idea which grants power back to people where it belongs: into their own hands rather than being controlled by governments or concentrated among large corporations. Blockchain technology is one of the many examples showcasing how decentralization can benefit us all.
The blockchain has gone through a few iterations in the finance industry which have proven to be powerful tools producing real-world benefits for businesses and consumers. In addition, blockchain technology has been introduced to advanced third-party insurance products and claims processing. If you are interested in Bitcoin, you can check Bitcoin and Fiat Money.
Many companies have begun to experiment with different levels of transparency in insurance transactions, particularly around claims processing, when many industries are under heavy scrutiny for fraud and abuse. Some firms have found success in their tests, but work is still required before we see widespread adoption of this new technology. Let’s discuss the adoption of blockchain technology in the insurance industry.
Towards the development of, or introduction of compressive health records:
The blockchain will allow everyone to develop and introduce a compressive health record. It will be especially beneficial to those with chronic or terminal illnesses who are hard to treat or manage because their illness is not easily understood or categorized. In addition, the use of the blockchain would allow individuals in need of healthcare to share their data across all providers quickly and securely.
To help reduce fraud within insurance claims processing:
With the decentralization of implementing a blockchain into an insurance company’s infrastructure, it would be difficult for fraudulent behaviour to go unnoticed and unreprimanded. Unfortunately, today fraud is prevalent in many industries, and there are few natural ways to combat it because most of these activities have become decentralized.
To cut out the middleman:
Blockchain technology is used to track assets that are being sent from one location to another. The blockchain will be able to store a record of quality assurance, processing, and everything in between that takes place throughout the shipping of an item. As a result, it can provide many companies with a more efficient way of conducting business and cut middleman fees.
Since the beginning of insurance, fraud has been an issue that has plagued insurance companies across the globe. However, with the introduction of blockchain technology and smart contracts, it will be nearly impossible for fraudulent activities to occur.
Improving provider directory accuracy:
Today’s provider directory is a vast database of names, contact information and physical addresses. The problem companies face when looking for a contact or an address is that people leave their information on websites, email, social media, and unsecured databases where anyone can easily access it.
The blockchain will allow for a more secure ledger that allows for secure and easy access to the contact information, addresses and more from every company which will help companies conduct their business in much faster/more efficient ways. Since the introduction of blockchain technology into healthcare, more research has been conducted to understand how the industry can use it to improve patient care and outcomes.
Simplifying the application process by making it more client-centric:
The introduction of blockchain technology will simplify the application process by making it more client-centric. This technology will reform the marketplace to ensure a better fit between the applicant and their policy. The companies that integrate this new blockchain technology are likely to benefit from an improved reputation, a decrease in client churn, and an increase in customer acquisition.
Implementing a blockchain ledger system would allow for real-time sharing of information between insurance carriers globally instead of relying on intermediary organizations to relay information that can take days or weeks before the information is available or accurate.
Isolating a consumer relationship with insurance companies:
The blockchain could be applied to the insurance industry by allowing for a greater degree of autonomous interaction between insurers and consumers without the intervention of third parties. This interaction will allow for the isolation of a consumer’s relationship with an insurer, thereby eliminating issues related to data privacy and ownership.
It would, in return, lead to improved efficiency in processing payments, fraud detection and claims processing.
Providing a basis for research initiatives into alternative regulatory models:
The introduction of blockchain technology could provide a basis for regulatory agencies like the SEC or the Financial Industry Regulatory Authority (FINRA) in order to conduct further research on alternative regulatory models. In the past, regulatory agencies have been reluctant to conduct research on alternative models and findings because it could be seen as being against a company’s or an industry’s interests. As a result, blockchain technology could facilitate private and public investment in firms engaging in high-risk activities.
A Peer-to-peer platform for distributed insurance:
The peer-to-peer platform is a system where two or more parties can transact directly with one another using an intermediary, which provides trust, privacy and equivalence of contractual rights, and it will improve the productivity of this industry to an exceeding extent.