The insurance industry are attempting to use Blockchain solutions to prevent fraudulent claims, digitally track medical records, and more.

While technology has permanently changed entire industries over the years, the global insurance industry in many ways, is far slow in their technology advances.

Regardless of the many online brokers, calling insurance brokers by phone to purchase new policies is still a common approach. Policies and paperwork are often still paper based, meaning claims and payments can be error-prone and require manual approval by administrators.

Each step of the insurance process is potentially a point of failure, where information can be lost, policies misinterpreted, settlement times lengthened and claims not accurately resolved.

Insurance companies working with Blockchain will have to overcome regulatory and legal issues before we experience industry-wide change.

Whether Blockchain can overcome the legal and regulatory hurdles to become a default standard in the insurance industry, time will tell, although it is anticipated it will. The possibilities are endless, with insurance organisations exploring insurance applications for the Blockchain revolution.

These include:

• Fraud detection and risk prevention: Blockchain (and AI) can help eliminate common sources of fraud in the insurance industry, also using AI to identify fraudulent claims.
• Property & casualty insurance: A shared ledger and insurance policies executed through smart contracts can bring efficiency to property and casualty insurance.
• Health insurance: Medical records can be secured and shared between health providers, increasing interoperability in the health insurance ecosystem.
• Reinsurance: By securing reinsurance contracts on the Blockchain through smart contracts, the Blockchain can simplify the flow of information and payments between insurers and reinsurers.

Insurance and the Blockchain, soon to  be the norm?

While Blockchain technology is still in its infancy and not yet mainstream, there are already a number of promising use-cases and applications for it in the insurance industry.

From an industry perspective, insurance companies need to align around standards and processes within Blockchain technology. While Blockchain technology can provide insurers with better tools for collaborating and sharing data, the insurers themselves must be willing to work with each other.

Finally, the insurance industry is highly regulated to protect consumers from abuse and insurance companies from taking on too much risk. Legal and regulatory frameworks for insurance need to evolve and provide clear guidance for Blockchain technology to succeed.