A blockchain is the technology of quite broad range of application. With its further development, many spheres of our life would become simpler. This way of data systematization and storage can be applied not only in the field of cryptocurrency. Blockchain can be successfully used, for example, in the creation of real estate registers. It is ideally suited to the following sectors:
- Marketing and many others.
What makes the blockchain technology so appealing for users?
The main, but not the only, benefit is security at the database level. At the moment, this technology with the unique principle of its operation has no analogues. The operation algorithm is controlled by all participants of the system, and all its operations are completely transparent. The possible fraud and penetration by unauthorized persons are excluded. This is followed by the postulates that show the benefits of blockchain in the modern world:
- The system is decentralized as there is no main server of the data storage. Information is available to each participant of this “network”;
- All ongoing transactions are transparent to other participants;
- The information is stored in an encrypted form, therefore, ensuring the confidentiality of the network’s participants;
- The system is reliable, and this is fully justified;
- Additional information is validated by all team members.
How technology can help to modernize and “refresh” the Insurance business
Let’s review this technology in detail.
Some experts with progressive views believe that the appearance of the blockchain foreshadows the fourth industrial revolution: its contribution to the human activity is so global. The Insurance sector itself has not avoided this progressive solution. This technology can help staff and management in the following ways:
- Significantly speed up the document management
- Increase the protection of stored data
- Reduce operations cost due to the reduction in the duration of the insurance claims analysis.
Let’s see what real benefits the new technology will give to insurance organizations.
We will only mention a few blockchain-specific benefits:
- The volume of paper documentation will be many times smaller;
- An applicable system will process and confirm insurance claims for a short period of time;
- The possibility of unauthorized access to information and various illegal manipulations in the system will be reduced to a minimum value;
- The quality of information required to make an insurance contract will increase;
- All processes in the insurance sector will be more efficient and productive.
Smart contracts and insurance
Every day the Insurance industry processes an enormous amount of necessary information and data. Many operations and procedures are carried out to analyze contracts with customers, for example:
- Assessment of the partner
- Setting the premium
- Prevention of fraudulent schemes and manipulation, etc.
Usage of a drastically new blockchain technology can simplify activities making them more rational and safer for both insurers and their customers.
In this case, the technology of so-called “smart” contracts becomes available.
Their peculiarities are to facilitate the reconciliation, enacting and implementation of Insurance contracts. Such algorithms are supposed to be made automatic.
The “smart” contracts will be able to replace traditional “on paper” agreements in the future.
The Insurance contract is a legal document with complex professional terminology which is quite difficult for understanding by an average person who is not familiar with jurisprudence or Insurance. The “smart” contracts will help to make Insurance more accessible and understandable for everyone. Such contracts are completely transparent and trustworthy for consumers of insurance services.
Blockchain as a strategy of new clients’ onboarding
The key position here is to provide customers of Insurance companies with the confidentiality of their personal data.
Many customers restrict their interaction with partners because of the risk of losing control over their personal information. The latest technology will eliminate data leaks and avoid the need to regularly ask customers the same questions to confirm their identification.
The user’s personal data may not be directly stored on the blockchain. It can be available on the user’s device. The registry will only store the verification information.
The scale of the system, in this case, makes the technology as useful as possible because blockchain provides all the numerous participants with an opportunity to access the data at any time.
The start-up Tradle simplified and sped up the onboarding of new customers. In this case, the innovative principles of blockchain help faster and more efficiently check customers’ data for identification and verification (passing so-called KYC process or Know Your Customer).
The client of the company must pass all the necessary stages of verification before a contract closure. Once it was verified, a customer can forward these verified data to other organizations to sign contracts with them. Thus, there is no need to repeat the customer’s verification. This means that the onboarding of potential customers of Insurance companies is simplified.
Today, blockchain is a strategy of comprehensive interaction based on the principles of confidentiality, transparency and rapid response. None of the participants in the system is able to carry out any actions secretly, and the invisible activity of third parties is also excluded.
The technology will have benefits in the Insurance sector providing skillful use of the “smart” contracts algorithm.
Blokchain will help insurers to operate with important customers’ data quickly, accurately and with minimal risks.
There will not be necessary to repeat again the same identity verification.
The system can find worthy and broad application because of its multipurposeness in the Insurance sphere.