The insurance industry has seen technologies come and go, from the early days of the intranet and private computers that exist to process information into data. Today, these technologies have since been retired as the intranet has given way to today’s complex internet structure while private computers have moved past its bulky format into thousands of computers that are living inside a server as virtual computing machines.
Despite the transfer of technology, the insurance industry process of enrollment, claims, reinsurance and maturity have practically relied heavily on paperwork and tedious processes that require collaboration across institutions.
Since 2012, the development of Blockchain has focused in alleviating the costly, time-consuming and redundant processes that are still associated with insurance. Blockchain’s premise of self-processing transactions, smart contracts keeping and decentralized applications are designed to help the insurance industry practice a lean and streamlined insurance processes. This disruptive but culminating premise is seen to save the global insurance industry – billions in terms of resources needed to complete an insurance cycle.
Automation for Mobility
Despite the information systems that are employed by large-scale industry institutions, claims based on maturity and health dependent medical insurance coverages have yet to keep up with the patient’s needs for its enacted policies. Often, paperwork and deep information verification are lagging behind the need for real-time policies to be claimed for medical coverage.
Automating the process of claims has been widely discussed and with the application of smart contracts that store policies of the customer, the process of claiming can be made faster, seamless and automatic under a Blockchain enabled information system.
By underwriting medical information into a beneficiaries’ mobile device that contains encrypted data of the permissioned insurance policies under the Blockchain, insurance companies can process medical claims without the need to see medical information to validate a claimants insurability.
No Claims Process?
Under a common insurance claims process, each insurance provider has their respective claims process. What they have in common is the amount of work needed to complete the insurance claim process. Policy beneficiaries must first gather all required information into filed paper to start the claim process. It is processed, verified and coordinated with relevant parties in the insurance stream. The claim is processed and the beneficiary must also pass several verification checks to claim their benefits.
But what if, under Blockchain, the claims process becomes self-fulfilling and does not require information clerks as verifiers?
That is the simplicity and automation that Blockchain is developing to not only shed time and cost, but also enhance the total insurance experience for their clients.
In a permissionless claims process under Blockchain, when the insurance policy matures, it will notify the parties involved: the claimant, the administration and finance as well as partners that the claim is ready. Under conditional provisions, smart contracts are self-executing when the underwritten data is triggered by an event variable that matches the policy clauses.
All in all, the customers are the ones who are to benefit from Blockchain’s fulfillment of the claims process. It becomes self-sustaining self-actuated, and given the structure of the distributed ledger, the claims process cannot be interfaced with fraudulent claims. This too, will help combat insurance false claims.
DynaQuest Technology Services is a Blockchain consulting, resource provider and support specialist for insurance companies that are looking to transition to Blockchain.