The Connection of Blockchain Technology and Insurance
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The Connection of Blockchain Technology and Insurance

September 28, 2020      Guest Author

Insurance was always the sleeping industry in terms of innovations. It’s the most centralized and conservative one, and it seemed nothing could break its walls. Little by little, the benefits of blockchain permeate the insurance world lately. This is a customer-driven chance since people all over the world lose trust in centralized financial institutions.

Blockchain can be useful in insurance, given you choose a reliable company like The implementation of new technology allows for saving time and resources, making every transaction almost immediate and fees much lower. There are lots of hopes but also lots of fears connected to cyberattacks.

Let’s see why blockchain is good for the insurance industry.

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Prevention of Abuse and Scam

It’s very difficult to detect insurance fraud and it costs tremendous amounts of money to fix one. Of course, this makes the industry very vulnerable to all kinds of scam. People can file several claims for the same care case.

But with the use of blockchain, all data is secured and all the sides of an agreement can check it anytime. It’s transparent and available for everyone, yet it’s encrypted. This will help avoid:

  • Ownership manipulation;
  • Same claim processing;
  • Unlicensed brokers.

Every customer can have their own digital ID that won’t be faked by a fraudster.

Trust Improvement

People lose their trust in banks, insurance companies, and other centralized financial institutions. They can’t see how their data is processed and what is done on the other side of the agreement. You never know if your information is sold to third parties.

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But if the system is decentralized, it’s more beneficial. No record can be changed or copied, which won’t awake distrust in data authenticity.

In the future, the implementation of blockchain can be enhanced by AI tech and machine learning, automating more processes.

Faster and More Accurate Processing

A lot of insurance companies still rely on heavy paperwork. This is risky due to simple human errors, not to mention such processing takes a ton of time. And the competition is high, so the speed is also a priority. And with humans, more speed often means less accuracy.

Process automation brings tremendous advantages. There’s a smaller margin of mistake, the company saves on labor, and the time of operation is much faster!

To Sum Up

Blockchain and other innovations are good for any business, especially if it’s connected to finances. It can automate so many processes and make them untouchable by any type of fraud. There are some safety concerns due to a cyberattack possibility, but up till now, the blockchain ledger hasn’t allowed anything like this.

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Customers get transparency and an opportunity to see how their information is processed. Transaction fees also reduce, which brings financial benefits as well. Companies get more security, less paperwork which may lead to errors. The savings are also visible, and there are more clients that trust such companies due to the benefits they get.

#Connection of Blockchain Technology