Technological innovations have significantly impacted the life and health insurance industry, bringing about transformative changes in various aspects. Be it onboarding clients, fraud detection, risk assessment, underwriting, or claims processing. The adoption of newer technologies has brought a paradigm shift in the insurance industry by enhancing efficiency and customer experiences. Trending technologies like artificial intelligence, machine learning, robotic process automation, big data, blockchain, etc. They are shaping the way insurance companies operate, assess risks, and interact with policyholders. In this article, let us concentrate on blockchain technology and how it is transforming the health and life insurance market.
Blockchain in health and life insurance
Blockchain technology is a decentralised ledger system that enables transparent, and safe record-keeping of transactions across a network of computers. In simple terms, it is a digital record-keeping system that is tamper-resistant and decentralised. Currently, the technology of blockchain in health and life insurance has been leveraged for fraud detection and automation via smart contracts.
This emerging technology has the potential to bring several transformative changes to the health and life insurance industry. Let us look at the areas in which blockchain is being leveraged in the insurance industry.
Blockchain in the insurance market
Blockchain technology is making a remarkable impact on the insurance market by improving efficiency and enhancing security and transparency in various areas and processes. Here are the areas where people are exploring and utilizing blockchain.
Fraud detection
The invariability and transparency offered by blockchain in health and life insurance records make it a powerful tool against fraud. Blockchain in healthcare makes it challenging for malicious actors to manipulate patient data. Likewise, blockchain in health insurance helps in detecting and preventing fraudulent activities and improves the overall integrity of the insurance system. As it is a decentralised digital record, data recorded on the blockchain cannot be easily altered.
Claim processing in health and life insurance
Smart contracts on the blockchain are a self-executing code, that can automate claims processing. It operates when certain pre-defined conditions are fulfilled. For example, a healthcare service is provided or on the occurrence of an insured event, etc. Once these conditions are met, the smart contract can automatically trigger and execute the claims settlement. This automation by using blockchain in health and life insurance reduces the administrative cost and time involved with traditional claims processing.
Underwriting
Blockchain in health insurance can be leveraged to access comprehensive data and get a 360-degree view of the policyholder’s risk profile. Incorporation of data from various sources can help insurers make more rational underwriting decisions and bring more efficiency in risk assessment and pricing. For example, IoT devices, and unified health records (that give access to records to a patient, healthcare provider, and insurer), etc.
Policy management in health and life insurance
Blockchain technology in life insurance offers transparency by allowing real-time updates to policy information. Policyholders, insurers, and other relevant parties can access a single, shared source of truth, reducing discrepancies and enhancing the efficiency of policy management. Automatic updation not only reduces administrative burdens but also makes the process efficient and builds customer confidence.
Customer service
By leveraging blockchain for transparent and secure transactions, insurance companies can build trust with their customers. This transparency can lead to increased customer confidence in the insurance process. Blockchain can enable the creation of tokenised incentives or loyalty programs, moreover encouraging policyholders to adopt healthier lifestyles and participate in wellness programs.
Compliance
Blockchain in health and life insurance can bring transparency in auditable transaction records. As the insurance industry is subject to stringent regulations, auditable and transparent blockchain transactions can help insurers stay compliant without hassles. Blockchain in health and life insurance can facilitate audits and regulatory reporting with the maintenance of tamper-resistant transaction records.
Data security
Cryptography is one of the main features of blockchain that ensures the security of sensitive customer data. Policyholder information can be securely stored on the blockchain, and insurance companies can have greater control over who accesses their data, moreover contributing to improved data security and privacy compliance.
Conclusion
Blockchain in the insurance market is still evolving. However, technological innovations like this have all the potential to reshape traditional insurance processes and transform the entire industry by increasing efficiency, and transparency, enhancing customer satisfaction and trust.