Blockchain Applications Will Disrupt The Insurance Industry

Consumers demand greater convenience and product customization. Learn how Kaleido’s Blockchain Business Cloud can help the insurance industry digitize legacy processes.

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Benefits of Blockchain for Insurance Companies

Imagine an immutable database that contains the policy information of every driver on the road today. When a wreck occurs, a police report is loaded to that database, repair estimates follow shortly after, and payments are distributed via this automated system. What hassles are eliminated? How much paperwork is gone? This is the potential of the blockchain in the insurance industry—and it’s a future within reach. Let’s look at some of the benefits the blockchain offers the insurance industry.

Trust

If a consumer can seamlessly file auto, property, and health insurance claims and get paid quickly it builds trust with the industry. The immutable ledger also ensures consumer data is kept private until safely shared when a policy is changed or a new policy starts.

Efficiency

Current claim systems are outdated, with siloed data, little automation, and a lot of paperwork. Blockchain moves legacy systems onto a shared IT infrastructure that allows agents, customers, and payers to interact seamlessly.

Collaboration

When a wreck or disaster happens, customers want to be taken care of quickly. Blockchain’s shared ledger makes it possible to accurately share data immediately, and smart contracts recognize events and trigger business transactions.

Insurance Use Cases

Blockchain has the potential to disrupt the insurance industry. As customers demand more modern, convenient business practices and faster settlements, institutions must adopt new technologies to survive in a rapidly changing business climate.

Automated Claims Processing

Smart contracts attach transactions to a predetermined event. In the insurance sector, if claims are approved and payments are scheduled automatically, an entire process once handled on paper is digitized and made more efficient.

Fraud Detection

Verified identities attached to an immutable record make it possible for an insurance company to validate the claim history of an individual. This digital reputation helps reject bad claims. Community governance, sharing of records between institutions, adds another level of accountability.

Micropayments

A consortium allows for more detailed data, as policies, claims, and payments are integrated and shared. This means insurance companies have the tools to develop more innovative products, like micro-policies that pay out on certain events. For example, imagine a farmer being paid instantly based on a weather event.

Compliance & Governance

Digital documents, claim data, and integrated policy details allow insurance companies to connect with industry regulators and scale ad hoc reporting at no additional cost. The blockchain also stores documents and records in the event of a disaster.

Improve Customer Experience

Most likely, something bad has happened if a customer has to call an insurance provider. That’s why a distributed system with automated transactions makes sense. Agents do less paperwork and the insured are taken care of more quickly—which drives customer retention.

Digital Transformation

As blockchain technology evolves, customers will come to expect efficiency, transparency, and automated interactions with insurers. This makes digital transformation not only an efficient business practice—but table stakes to compete in the future.

3 Weeks to Prototype

With over 500+ APIs and pre-built services and available to help you build atop a blockchain immediately—get to proof of concept in a tenth of the time of most enterprise development solutions. When The Institutes RiskStream Collaborative wanted to connect insurers to share vital records, they came to Kaleido.
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Challenges Facing the Insurance Industry

Traditionally, the insurance industry has been slow to change. Paperwork, phone calls, and a hassle to get claims approved met the consumer each time an event occurred. But consumers are demanding more convenience from an industry they have to interact with out of necessity. And insurance companies need to adapt.

Blockchain technology is a way for companies to eliminate overhead, automate claim processing and payments, and protect data. It is also a way for consumers to cut insurance companies out of the industry altogether, forming contract-bound communities that add funds to a pool and extract money when the group approves a claim.

Why Insurance Chooses Kaleido

With Kaleido, you can set up a network and integrate apps on top of the blockchain in minutes. This empowers innovators to get feedback faster and realize business value sooner.

Blazing Fast Deployment, Speed, and Scale

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Support for Multiple Blockchain Protocols
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FAQs

Will blockchain disrupt insurance?

Blockchain will drastically reduce overhead costs in the insurance industry. This will lead to lower premiums, faster payments, and product innovation as companies spend more time on solutions and less time on paperwork.

How does blockchain improve patient privacy in insurance?

Blockchain technology helps developers build solutions with verified identities, specific permissions, and immutable records. This allows insurance companies to automate business processes without sacrificing privacy. Because the distributed ledger is tamper resistant, auditable, and has no single point of failure, it is nearly impossible for bad actors to assume an identity or duplicate records to defraud a provider or policy holder. Kaleido’s platform helps enterprise developers stand up privacy enabled solutions quickly on Ethereum, Hyperledger Fabric, and Corda, all backed by Hyperledger FireFly.

How can blockchain eliminate insurance fraud?

Blockchain can eliminate insurance fraud through verified identities and immutable, redundant claim records. This database allows insurance companies to vet claims against an individual's digital reputation before paying a claim. They can also get real-time feedback on their total losses and performance against the average to identify risks sooner.