Insurance companies, by their very nature, are complex organisations where complicated decisions around risk have to be managed on a daily basis.  This is one of the reasons why the adoption of the latest technology, innovations and software solutions has been slower in the insurance sector than that of finance and banking.

Insurers have been historically beset with compliance issues, fraudulent claims activity, limited growth rate in mature markets and having to manage third party transactions and maintain large amounts of data has hindered the overall progress of the insurance sector.    But with the emergence and growth of the Insurtech scene in recent years, the major players are looking to tech to provide the answers and help move the industry forward to greater prosperity and profitability.

Blockchain has the potential to provide many of the solutions insurance companies are looking for by enabling insurers to speed up and automate many of their processes, to reduce reconciliation costs and improve service levels for customers. 

What is Blockchain?
Blockchain has been around for a long time now and is a robust technology that has firmly established its place in many other sectors around the world. It’s a decentralized, distributed and public digital ledger that can record transactions between two parties efficiently and in a verifiable and permanent way, without the need for a bank or other intermediaries.

Blockchain acts as a database by storing large chunks of data, however, these datasets are stored in blocks which are then linked together allowing for greater transparency, efficiency and security. Keeping in mind the numerous advantages that blockchain offers to the insurance sector, we can safely conclude that the insurance sector should view it as an opportunity that should be seized upon, rather than a potential threat. 

Can Blockchain be the answer to profitability?
The fast-paced nature of today’s world has raised the need to filter out only relevant data from large databases and then craft the best solution that revolves around physical risk prevention, instead of just focusing on compensating for financial losses. All of this requires complete access to the data, which then raises the question of data security and protecting sensitive customer information, which is a crucial challenge in the insurance sector. 

Deployed in the correct way Blockchain has the potential to provide greater transparency, accountability and more security for insurance company data.  By using a public ledger and decentralized digital repositories, blockchain improves security by making it more difficult for hackers to lay their hands on the data.  And there are numerous advantages that Blockchain offers around automating time consuming processes to drive efficiencies and productivity, thus leading to cost savings.   Storing large databases and providing access can increase transparency and streamline the processes that need to be carried out on the data such as risk assessment.

A new trend that has also been gaining attention in the insurance sector is the issuance of personalized smart contracts. These contracts link information from multiple sources to aid the issuance of claims, payments and reimbursements while ensuring greater speed and accuracy.    The overall benefit that this technology has is that it can also lead to enhanced customer service, greater customer satisfaction and will open up new revenue opportunities.  

If you line all of the potential benefits that Blockchain can offer the insurance sector then greater profitability is a logical outcome.

In Summary
Customers today have a natural inclination towards services that are faster and more convenient and one of the most striking features of blockchain is its accuracy and speed. 

Blockchain technology can help increase collaboration, create opportunities, reduce friction and fraud, increase transparency and build trust. Instead of wasting time on the maintenance and validation of data, insurance companies can then shift their focus towards transactions and account reconciliation. Distributed ledger technology (DLT) used in blockchains could change the way insurance companies are managed for the better. 

About Supermoney
Supermoney is a disruptive, innovative and highly customisable technology platform that simplifies the management of business networks and processes.  We work with best in class global partners to create technology products that are efficient, productive and highly effective and make Blockchain easy to understand, accessible and affordable to all.

To find out more about Supermoney or to see how we can help please get in touch – info@supermoney.co or visit w.supermoney.co