The insurance industry is bursting at the seams with potential use cases for blockchain technology.
Some say blockchain technology will improve the industry whether it gains a mainstream foothold or not. The thinking is that blockchain will force the re-evaluation of industry norms, and that its appraisal will reveal new cracks that need filling.
Blockchain automation, in virtually all cases, leads to greater efficiency. Through smart contracts, insurers will securely automate several aspects of onboarding, policy creation, and maintenance at a great savings of time and cost.
The blockchain will likely improve communication between insurers, too. As a secure means of file sharing, it could liberate formerly siloed stores of information.
Customers can also expect greater transparency from their policies in a blockchain-powered insurance industry. The shareability of blockchain ledgers leaves no reason for customers to be under-informed.
These benefits aren’t yet realized, but they’re within the realm of possibility.
1. Christopher McDaniel, President of RiskStream Collaborative
“The efficiency gains and ROI for blockchain are staggering. Eventually we will see new products, channels and new ways of doing business, but in the short-term efficiency plays are the number one benefit. The ROI for Proof of Insurance and First Notice of Loss in personal auto alone, represents hundreds of millions of dollars for the industry.”
2. Avesta Hojjati is the Head of R&D at DigiCert
“There are many benefits from blockchain, but risk mitigation is certainly the top benefit. Blockchain and its ability to being fully transparent IF implemented properly can certainly decrease the chance of fraud with claims.”
3. Dr. Marcus Schmalbach, CEO at Ryskex
“The greatest benefit I see is that it wakes the insurance up from its slumber. I have been part of this industry for more than 15 years and I have never experienced such an atmosphere of new beginnings. The blockchain is certainly not a panacea for everything, but it ensures that the industry questions itself, its processes, solutions and business models. This makes the insurance industry an attractive employer for the next generation. An interplay of tradition, new technology and smart employees secure a successful future of the insurance industry.”
4. Ryan Brubaker, CIO at Seven Corners Inc
“The number one initial benefit that blockchain could have in the insurance industry is that it can be used to create encrypted digital ID cards for policyholders—a form of identification that would be impossible to fake. Blockchain technology could also streamline the claims process. For instance, a customer submits a claim for coverage of an automobile accident, the police accident report or medical bills could be directly added to the digital file, eliminating the need for customers to track down and submit that paperwork.”
5. Thiru Sivasubramanian, VP of Architecture & Technology Strategy at SE2
“Transparency is the biggest benefit. The industry also envisions other business and consumer benefits, such as automating the underwriting process and cutting down on paperwork. Today we have access to multiple data sources, which takes a long time to process. As more data is made available in the blockchain with the consumers’ consent, we will be able to process fully underwritten new business much faster and issue policies in hours versus weeks.”
6. Hugh Karp, Founder of Nexus Mutual
“It's all about the ability to coordinate between each other more effectively. At the moment, blockchain provides some cost savings which will likely improve in the near future but longer term it is massively underestimated and could be transformational. Insurance companies are essentially capital coordinators, matching risk with capital. Public blockchains can do this natively and can therefore fundamentally change the insurance value chain. In doing so, not only can massive cost savings be gained but benefits can be redistributed to customers and interests between market customers and capital providers can be better aligned.”
7. Satadru Sengupta, CEO and Founder of Halos Insurance
“Insurers spend a good amount of time in validating that the data coming to them is authentic (not forged). This creates huge frictions with good customers. Blockchain based authentication brings huge benefit of trust through an invisible layer of community based (de-centralized) authentication. As we are using more and more Internet of Things (IoT) this will be even more prominent.”
8. Stan Nazarenko, CEO of Piprate
“I believe the biggest benefit from blockchain adoption is secondary to the technology itself. It forces us to rethink our approach to data processing and solve the long-overdue issues around privacy, security and efficiency in a proactive, rather than reactive way. Blockchain technology, due to its collaborative nature, encourages to move away from the ‘walled garden' approach to data security towards an architecture where information can move more freely but restricted only to the participants who need to have access to it. It enables the industry to reduce costs and offer new products that would have been too expensive if backed by traditional technology.”
9. James Song, Team Lead at Shadow Foundry
“Cost savings. New technologies can only be disruptive if they reduce costs, and blockchain definitely does that. You can probably reduce overhead by 90% by implementing ML and blockchain together to automate processes.”
Have expert insights to add to this article?
Share your feedback and we'll consider adding it to the piece!ADD YOUR INSIGHTS