The multi-trillion dollar insurance industry faces many problems such as fraud, human errors, and inefficiency. Among this myriad of problems, the biggest concerning problem of these is are the cyber-attacks. With these attacks, the sensitive data of millions of customers has been breached.
With blockchain, however, these types of problems can be countered efficiently. The blockchain solution provides a foolproof cybersecurity infrastructure. It allows the insurance industries to take care of their data more profoundly. For example, they offer the following benefits:
Providing a Strong Foundation for Cyber Security
Since the insurance industry relies heavily upon the data, this data must be fortified. As these blockchain ledgers are decentralized, it is almost impossible for someone to alter or corrupt this data. Instead, the information is stored chronologically in timestamps for recording all the events.
Also, the data encrypted on the blockchain is transparent for all the members that are part of the blockchain. This setting allows to indicate and resolve any suspicious activity,
Advanced Automation Procedures
The insurance industry is pervasive. It is prone to various faults, the most notable, human error and lack of proper communication. If blockchain is incorporated into these systems, it can easily replace the existing processes, reducing paperwork and human error.
Devising Smart Contracts
With smart contracts, blockchain allows the transparent transfer of data without involving the middleman. Blockchain-based smart contracts allow the two parties to meet and form a contract. This approach is more advantageous than physical contracts, as smart contracts can track insurance claims while performing accountability on both participating parties.
With blockchain, the insurance policies can be written in the form of coded and decentralized contracts. Through these contracts, the insured person agrees to pay a certain amount of money to the insurance company in return for getting coverage for his medical and costs. These blockchain-based contracts create data that can accept or reject any company claims based on these records.
Blockchain Incorporation in Global Insurance Companies
Several insurance companies have made use of blockchain in their company structure. These include:
FidentiaX is a Singapore-based insurance company that provides tradeable insurance policies.
Use of Blockchain by FidentiaX
The company allows its users to buy, sell, and store their insurance policies on its blockchain ledger. This blockchain-based marketplace uses tokenization techniques and places the existing insurance policies into an encrypted database, allowing users to quickly buy and sell their policies. It also helps the user by listing all of their policy’s details on a single platform.
Situated in San Francisco, California, Beenest is a decentralized home-sharing platform. This platform allows the users to book homes for themselves using its bee Tokens.
Use of Blockchain by Beenest
Beenest is collaborating with WeTrust for developing a blockchain-based insurance solution for homeowners. At present, the users can use Bee Tokens for booking rooms in San Francisco. However, this collaboration and their scope of operations are anticipated to expand further in the upcoming years.
As an open-source development platform, Etherisc is situated in Munich. Its focus is on the development of decentralized blockchain applications.
Use of Blockchain by Etherisc
Etherisc develops various decentralized blockchain-based applications for the insurance sector. The emphasis of this platform is upon using the ledger technology for reducing any inefficiencies, such as lengthy claim-processing procedures and expensive processing fees.
Guardtime is also a California-based blockchain solutions provider and provides insurance solutions to various sectors such as logistics, finance, cybersecurity, government, and defence.
Use of Blockchain in Guardtime
Guardtime is working with Maersk for implementing a blockchain-oriented maritime insurance platform. This platform manages risks and uses smart contracts for the establishment of an immutable shipping chain. This helps insurance companies for providing adequate coverage.
As a Zurich-based insurance provider, B3I is a group of insurance providers that looks for various advantages of blockchain and DLT (Distributor Ledger Technology) for the insurance industry.
Use of Blockchain in B3I
B3I strives to improve data and payment management with the help of blockchain. It also deploys blockchain-based solutions to reduce risks in the insurance industry whilst increasing the affordability of the whole process.
Teambrella is a Russian insurance platform that uses blockchain for devising smart contracts and initiating insurance payments. In Teambrella, a team co-insures the policy holder’s claims instead of a centralized company.
Use of Blockchain in Teambrella
At Teambrella, blockchain and smart contracts are used for transparent voting for processing a claim and executing the payment for that claim.
Lemonade is situated in New York. This company has efficiently combined blockchain technology with AI. It allows renters and homeowners to get insurance starting from $5 and lasting up to $25 monthly.
Use of Blockchain in Lemonade
The company model at Lemonade is based on smart contracts. It works by taking an allocated fee from each monthly payment and directing the remainder for future claims. If someone claims the loss, then the blockchain-based smart contracts will verify the loss before initiating the payment to the customer.
Dynamis is situated in London and works on the model of the popular cryptocurrency Ehtereum.
Use of Blockhain in Dynamis
Dynamis focuses on unemployment insurance (also known as social capital). To verify their present employment status, all the policyholders have to do is provide their LinkedIn profile. The company’s blockchain will then verify the profile connections before issuing the insurance payments.
Alysidia and the Blockchain Solutions
Alysidia is known as one of the most pioneer software solution providers. We provide regulatory solutions along with all sorts of software solutions to various industries. Our blockchain solutions have already been incorporated in multiple sectors. Now, we are providing them to the insurance industry to streamline their processes. For further information in this regard, you can visit our website alysidia.com.