How Blockchain Can Help the Insurance Industry
You may have heard the term “blockchain”, or even “bitcoin” going around lately. It’s a hot topic currently and will only continue to trend while more and more people become educated about it. Blockchain is a simple concept, but can difficult to explain because of its abstractness.
So, What Is Blockchain?
Have you ever bought something from someone online? Maybe through a third-party service like eBay or Etsy? Well, in those transactions, there are multiple ledgers with multiple versions of the truth of the occurred transaction. Multiple ledgers, or records, means there is a bigger chance of fraud or human error. Blockchain is a shared ledger and backbone of bitcoin, for recording the history of transactions, which cannot be altered.
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How Does It Work?
Online transactions are complex. Sometimes there are contracts and other types of paperwork involved when you purchase something online from another party. With blockchain, you can avoid the middleman and exchange money and even property, conflict-free. Eliminate the paper trail and speed up your transaction time. Blockchains use a technology called “cryptography”, which is a mathematical algorithm for storing and transmitting data in a certain way that only the parties involved in the transaction can use.
Check it out: Blockchain 101 (Infographic)
What Part Does It Play In Insurance?
Insurance has the distinct potential to flourish in the future of blockchain and bitcoin. Blockchain has the ability to simplify filing claims, reduce the cost of premiums, and help insurers create niche coverage. Blockchain will also help with fraud detection and solutions. Transparency is also a large benefit of using blockchain in insurance because trust is the most important bond between agents and customers. With blockchain, agencies will have no choice but to make some potential price corrections and adjustments to their business models. Agencies can also track and manage their assests, tangible or intangible, such as cars or real estate, or stocks and bonds.
Check it out: Blockchain In Insurance (Infographic)
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