Insurance is an old-school industry facing increasing technological disruption in a digitalising world. Insurance technology is now used by approximately one third of insurance customers, providing users with convenience and more opportunities for personalisation /1/. As this trend grows insurance companies will have to get on board or become irrelevant as users come to expect digital options for accessing their insurance plans.
Maersk explores Blockchain for shipping insurance
Earlier this year the shipping company Maersk began a 20-week proof of concept trial investigating Blockchain in marine insurance. In shipping, shippers buy insurance in case goods become stolen or damaged on their path to the consumer. The Blockchain trial explored possibilities for sharing shipping data between clients, brokers, and insurers, rather than using the current process requiring contracts to be signed manually at each port. The implementation should make this auditing process easier and make data sharing manipulation-safe /2/. Many parties will benefit from easily being able to participate in settling the terms of premiums and seeing that conditions are satisfied through the transparent record created by a Blockchain.
Identity can be verified using Blockchain
This development made clear that Blockchain is headed for other areas of insurance as well. Insurance transactions function in a like manner regardless of industry. Fraudulent claims are especially problematic in insurance and Blockchain can establish a system for identifying fraud by creating customer registries saved on a Blockchain that automatically verify the legitimacy of documents /3/. This would mean big savings for insurance companies facing problems with identity theft leading to fraudulent claims.
Technology adding transparency and simplifying contract enforcement
According to an article in JaxEnter, the future of Blockchain in insurance may be implementations in usage-based insurance. In September the magazine speculated that by using tracking and motion technology to collect data on a driver and saving that data in a Blockchain, insurers could use transparent records of driving habits to calculate risk and set prices for premiums. They also wrote that Smart Contracts could power automation in claims, especially in enforcing insurance contracts, for example, payment for reparations on an accident when the reparations ought to take place by an auto shop certified by the insurer /4/.
It is clear that Blockchain is headed for the insurance industry. The technology will be a key player in increasing transparency for customers and insurers, as well as simplifying verification processes and contract enforcement.
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