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Blockchain technology in insurance

Blockchain technology in insurance
Blockchain brings a lot of changes to the insurance industry, opens a wide range of new opportunities, and helps to significantly increase client satisfaction. But what is even more important is that blockchain becomes a very good choice for overcoming many problems that are currently observed in the industry.
Among the issues that today act as a barrier to further growth and development of insurance firms, we should name the risk of fraud, high operating costs, low level of data security, the inefficiency of processes, and mistakes caused by human factors. That’s exactly what well-thought-out blockchain tools that are correctly integrated into the existing working processes can solve.

Why blockchain for insurance companies?

Why blockchain for insurance companies?
The capacity of blockchain technology to ensure a high level of trust in ecosystems that is possible thanks to the provided transparency and fraud mitigation plays an important role in its adoption within the industry. Especially, when combined with other emerging technologies like big data and AI, blockchain can fully revolutionize the way insurance companies interact with clients.
Blockchain can greatly increase the cost-effectiveness of insurance businesses which is explained by the elimination of mediators and the reduction of errors that can lead to financial losses. Moreover, blockchain-powered tools can streamline and facilitate a lot of tasks for employees who will get more time to focus on other aspects of their work.

Blockchain for insurance management platforms

Blockchain for insurance management platforms
Traditional insurance management platforms are intended for optimizing existing business processes and increasing their efficiency. They typically have features for monitoring insurance policy details, viewing and working with client data as well as improving the productivity of insurance agents.
And blockchain can breathe new life into such systems. Blockchain-driven tools can enhance the process of management of insurance premiums, risk portfolios, real-time underwriting, and claims. For automating administrative procedures, you can fully rely on the power of smart contracts, while ML algorithms can bring the accuracy of forecasts to a completely new level.

Our top services for the insurance industry

Blockchain Development
We can help you to boost your insurance business performance with the help of a feature-rich blockchain platform that will transform your working processes.
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Blockchain Consulting
With a deep understanding of the ongoing industry needs, our experts will offer you the most efficient strategy for implementing blockchain solutions into your work.
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Documentation & MVP
Our team will deeply analyze your requirements for a blockchain product and will build an MVP for validating your idea. You can also rely on us in tech documentation creation.
Blockchain Document Management
With blockchain tools, you can fully digitize your paperwork. We can develop an advanced platform powered by smart contacts for ensuring absolute data security and authenticity.
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Smart Contract Integration
We can build reliable smart contracts that will reflect the peculiarities of your workflow and integrate them into your insurance management system.
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DApp Development
Our developers use the latest blockchain tools to create user-friendly decentralized apps that will help you to facilitate a lot of tasks for your employees and customers.
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Crypto Payment Gateway
The crypto payment gateways developed by our team will ensure absolutely seamless and secure transactions in crypto assets that are actively gaining popularity.
Support & Maintenance
To support the best performance of your blockchain application, as well as its high portability and scalability, we provide professional software maintenance services.
Insurance digital wallets
A digital wallet can be either used as a standalone app or integrated into the already existing insurance platform for conducting instant payments and storing valuable data.
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P2P insurance policy marketplaces
With a marketplace of this type, you can provide users with a unique possibility to trade insurance policies that will be available in the form of digital tokens.

Aspects to pay attention to

Cybersecurity
It’s important to bear in mind that the security risks can increase because of poor validation procedures and a lack of multi-signature.
Majority Attacks
When more than 50% of the network is controlled by 51% of network participants, it leads to a power imbalance which can result in serious attacks and losses.
Accountability
Blockchain platforms allow companies to eliminate intermediaries from many processes. But in such a case, it is crucial to detect who will bear responsibility.
Digital Theft
While digital asset thefts are rather popular in the modern world, companies should pay special attention to protective measures.

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Blockchain Insurance Use Cases

KYC/AML Processes and Anti-Fraud Solutions KYC/AML Processes and Anti-Fraud Solutions
With blockchain, you can automate some of the KYC/AML processes aimed at the verification of a customer’s identity and the source of funds. What’s more, records kept on the blockchain can be simultaneously verified by multiple participants.
Claim Management Claim Management
Thanks to the use of smart contracts, the time needed for processing insurance claims can be greatly reduced. As every step can be automated, the result can be received very quickly and the level of accuracy will be very high.
Customer Engagement Customer Engagement
Quite often clients are afraid of sharing their sensitive data due to security risks. But with blockchain-driven tools, their personal information is kept safe. Moreover, it is also possible to maintain the full anonymity of users.
Automatic Insurance Automatic Insurance
Thanks to smart contracts, payouts to customers can be conducted instantly and automatically without the necessity to wait for money for a couple of days as it usually happens when insurance companies use only traditional methods.
Easy Reinsurance Easy Reinsurance
Reinsurer companies help to balance the market amid periods of instability associated with multiple risks. Reinsurers can use blockchain technology for increasing their own capacities, protect their own assets, and stabilize losses.
Microinsurance Microinsurance
Microinsurance helps to decrease the poverty rate in society. Thanks to blockchain technology, such schemes can be used as a powerful tool for enhancing the well-being of low-income social groups, especially in developing markets.

Advantages of employing blockchain in insurance

Cost Reduction
Cost Reduction
With the possibility to work without intermediaries and to automate a lot of processes, operating and labor costs for insurance companies can be decreased.
Great Automation
Great Automation
Automation helps to reduce the time and resources required for every step, as well as minimize errors that are inevitable when all tasks are performed manually.
Reliability
Reliability
Blockchain technology can also increase the accuracy of every step of the work of insurance companies and ensure data immutability and verifiability.
Peer-to-Peer Insurance
Peer-to-Peer Insurance
Blockchain provides convenient ways of conducting financial transactions between insurers and clients. It also helps to facilitate the execution and administration of tasks in the industry.
Risk Management
Risk Management
As blockchain can verify and validate the authenticity of all types of data provided in insurance claims, companies can be sure that they rely only on entrusted information.
Reducing paperwork
Reducing paperwork
With smart contracts, it is possible to eliminate a lot of paperwork and conduct a lot of tasks in no time without any effort from the side of employees.
Higher-quality data
Higher-quality data
All information that is kept on the blockchain is verified which fully proves its accuracy. Moreover, immutable ledgers can also guarantee that all data is stored safely.

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Blockchain insurance use cases

Blockchain life insurance
Blockchain life insurance
Blockchain life insurance services can change clients’ understanding of how insurance companies work. First of all, the processes and tasks related to providing life insurance policies, as well as handling claims, and conducting payouts can be streamlined and facilitated. Secondly, all clients’ sensitive information can be securely stored without any risks that it will be occasionally altered or lost. Moreover, there is also a huge benefit for insurers that can optimize their staff and reduce labor costs thanks to the automation of multiple processes.
Blockchain healthcare insurance
Blockchain healthcare insurance
Blockchain health insurance is a very promising sphere for the use of this technology. It can guarantee significantly faster processing of claims and the reduction of costs for clients. Thanks to blockchain, medical data can be transferred between healthcare institutions and organizations really fast and securely. When sensitive information about a patient’s health is stored on the blockchain, authorized representatives of medical service providers and insurers can get access to it without compromising the confidentiality of people. Moreover, records that are kept on the blockchain can’t be changed without creating an audit trail.
Auto Insurance
Auto Insurance
Car insurance blockchain platforms can revolutionize the industry and set new standards for it. Especially, the changes will be tangible when it comes to the ways of processing insurance claims and conducting payouts. When insurance companies apply only traditional methods for working with customers, the process of analyzing an incident, calculating payouts, and conducting a transaction may take up to several days, if not weeks. With blockchain, everything will be significantly faster and people will have the possibility to get payouts practically immediately.
Reinsurance
Reinsurance
The process of data sharing between insurance companies and reinsurers traditionally was a rather challenging and time-consuming task that required a lot of manual work. Moreover, there was always a risk of losing important data which was impossible to restore. But blockchain technology can change this situation and make the entire process much more efficient. As a rule, insurance agencies work with several reinsurers for the same risks. As a result, big volumes of information have to be shared between a lot of parties. Thanks to blockchain ledgers, the necessary information can exist on reinsurers’ and insurers’ networks at the same time.
Micro-insurance
Micro-insurance
There is an opinion that micro-insurance schemes have no future as they are quite inefficient, require a lot of administrative effort and manual work and at the same time are associated with huge expenses as even for small payments, there are rather high fees. As a result, there can be really no sense to deal with this type of insurance. Nevertheless, when blockchain-driven platforms enter the game, the situation is already absolutely different. Such solutions allow insurance companies to set particular rules and fully automated underwriting and claim processing tasks in accordance with them.
Property & casualty insurance
Property & casualty insurance
As well as any other type of insurance program, this one traditionally includes a lot of paperwork and manual processes. As a result, it is not surprising at all that errors are rather widely spread which can cause a lot of problems for both insurers and their clients. But with digitalization and namely blockchain technology managing and insuring physical assets can be fully transformed. Blockchain-powered tools can be used for digitally tracking physical assets, automating the processing of claims, reducing operating costs, and speeding up the process of conducting payments.
Travel insurance
Travel insurance
This type of insurance is well-known to everyone who has traveled at least once. And a huge part of travelers understands how long they need to wait for payouts in case of delayed flights or any other unexpected situations occurred during their trips. But those businesses that choose blockchain as a key technology for building their systems can provide their clients with automatically processed and verified claims. Such an approach allows people to get money transfers immediately in case of any unpleasant event like delays in their flights.
Title insurance
Title insurance
With title insurance, people can get compensation in case of any losses caused by errors in such legal documents as titles. Those companies that provide insurance policies of this type often share information about policies with one another. Blockchain systems can provide the possibility to get access to previous title insurance policies. Thanks to this option, all the related processes and transactions can take significantly less time. Moreover, the risk of fraud is lower as blockchain is known for its transparency and immutability.

Blockchain insurance app development process

#1
Strategy
We begin with an analysis of your existing software infrastructure and building a strategy for implementing blockchain into your business processes.
#2
BA and Planning
Then, it’s time to closely analyze your needs and discuss the solutions that can satisfy them. We also need to plan the development process.
#3
UI / UX Design
Our team will study the peculiarities of your product and offer eye-catching UI/UX design that will ensure absolutely easy navigation.
#4
Development
We will use the latest tools and technologies to create a blockchain product in full accordance with your expectations.
#5
Testing
We always pay great attention to product testing as for us, it is crucial to find and fix all the bugs before users can find them.
#6
Deployment
When everything is ready, we will make your blockchain solution available to use. We can also seamlessly integrate it into your software infrastructure.
#7
Improvement and Support
After the deployment, our team will still stay at your disposal. And we will be always ready to help you to update or improve your app.

FAQ

Why should insurance companies consider investing in blockchain systems?
There are several reasons for that. Let us enumerate at least the most important of them. First of all, blockchain can help insurance firms to reduce manual work and streamline a lot of processes. Secondly, thanks to such tools, it will become easier to verify data which will reduce the time required for this task. Thirdly, the elimination of intermediaries involved in many processes will result in cost optimization. All these changes will have a positive impact on customer experience and can bring higher revenues.
Is blockchain a threat to the traditional insurance industry?
It won’t be correct to say that blockchain can “kill” the traditional insurance market. Vice versa, it will give it a new life. Amid the total digitalization of the business world, clients’ expectations related to their interaction with service providers and the quality of services have changed. And those companies that use only traditional approaches in their work are gradually losing their chances to become market leaders. Nevertheless, timely implementation of tech tools can be a game-changer for them. That’s why those traditional businesses that will smartly adopt blockchain technology can start a new chapter in their lives and conquer absolutely new peaks that were unattainable to them before.
How to build a good blockchain solution for the insurance industry?
The first step that you should do if you have an idea for a blockchain app for an insurance agency is to find a reliable development team that will be able to transform your ideas into a real platform. It is important to find a team that can not only build software apps in accordance with a technical task but also provide consultation services and help to develop the right strategy for the implementation of blockchain technology into your business processes given the peculiarities of your offerings and the ongoing market conditions. Moreover, relevant expertise in the blockchain sphere is a must. At our company, we have all the required resources and knowledge for delivering innovative blockchain solutions and will be happy to help you in the realization of your projects.

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