To overcome challenges of fraudulent activity and digital transactions, the insurance industry is beginning to introduce blockchain, which is designed to bring accountability, security and transparency to the industry, according to Yahoo Finance.
Below are four areas blockchain could improve within the industry:
1. Security: Because blockchain is a public, decentralized ledger, the technology can be accessed by all parities involved who verify all transactions. This makes it easier to detect potential fraud activity. The technology also can validate every piece of data inputted.
2. Third parties: Blockchain centers around the removal of third parties. The decentralized ledger can automate all the transactions and claims through personalized devices. Users can more easily view past claims and payments through the blockchain.
3. Customer loyalty: Blockchain technology aims to eliminate policy burdens that customers have faced in the past. Customers will be able to access their histories and necessary information without needed to jump through hoops to get in contact with providers.
4. Reinsurance: Blockchain networks are designed to reduce risk by streaming the flow of information between reinsurers and insures on a shared ledger. Reinsurance can get very complex as it protects insurance companies when large numbers of claims accumulate at a single time.