Blockchain for Insurance: Innovation and Revolution
Blockchain for insurance ? Unlike other economic sectors, the insurance area seems to make decisive steps forward. For what reason? With the blockchains, insurance companies can trace and store all data and information and thus guarantee transparent assessments.
But let’s try to explain what blockchain means : distributed databases that do not have a central authority, inside which information and data are collected, then made available to those who need it or use it.
The debate about their use is decidedly heated, many critical observers of the “chain of blocks” believe that this technology is an expensive and difficult solution to practice. This, except for insurance, where the blockchain could really make a difference. The economic model of the insurance is based on the coverage of a risk and the verification of certain conditions.
Trying to insert the databases distributed in this context, Ernst & Young has identified five key areas for the use of blockchains in the insurance sector, which are: anti-fraud and risk prevention, prevention and management of claims, internet of things, new payment and reinsurance models. How can blockchain application in insurance companies intervene ?
Tracing and detecting data that are now being acquired by new tracking technologies, such as GPS, or by other sensors that save information within blockchain databases, making them available for checks and evaluations. The goal is to have more knowledge of the asset to be insured in order to better calculate the risk based on actual data, cutting management costs and bureaucracy.
The blockchain application can give rise to different insurance models created by measuring actual and non-hypothetical data. We have a first approach to use with Black Insurance, an Estonian startup that would like to connect brokers directly to capital, using distributed database technology. This company wants to give individuals the opportunity to invest directly on a portfolio that is currently accessible only to large insurance companies.
In this way, insurance brokers can meet the needs of the market by providing more flexible and optimized insurance products for the end user. The development of blockchain insurance technology is absolutely not cost-free, but it can actually produce benefits on both sides.
For the insured, there may be insurance products that guarantee an ever increasing coverage, assessed on the basis of real and personal conditions, not generic statistical data. At the same time, insurance brokers and agencies can rely on a database where to find correct and transparent data for the creation and evaluation of customized and less expensive solutions.
Posted By: Web Digital Media Group