Blockchain is a distributed ledger initially used by Bitcoin cryptocurrency and eventually by many banking organizations to record transactions between parties with high security. It is start of Blockchain arena and it is anticipated to have a long sustainability and acceptability in various industries.
One of the biggest use cases in Insurance Industry is adoption of blockchain in claim processing. Insurance contracts involve various parties as agents, brokers, repair shops and third party administrators involving manual work and duplication at various stages of value chain. Using blockchain, verification of transactions will be done without any human intervention and making it completely automated process at various stages.
Benefits for using blockchain in claim processing –
- The distributed ledger allows various parties to update the information securely like updating claim forms, evidence, police report etc helping in reduction of loss adjusted (LAE) expenses.
- Fraud Detection – As blockchain maintains a ledger of multiple parties, it has ability to eliminate any errors and frauds. Blockchain technology using the high computing power authenticates the customers, policies and transactions.
- Payments – Claim payments can be made without any need of intermediary authority for transaction validations which helps in reducing the overall operational cost of claims processing.
- As this is highly secured transactions, multi review process will be eliminated resulting into speedy claim processing.