Blockchain solutions have been disrupting IT-industries for several years now, one after another. Now, the time has come for insurance segment. Distributed ledger technology has gotten to the insurance market in recent years, and it has already made a difference.
Let’s discover the principal advantages of implementing the blockchain infrastructure into your insurance software and figure out how to select the best blockchain development outsourcing services.
Blockchain Solutions: Why Decentralized Ledger?
Conventional databases in the FinTech imply the separate centralized data sources. They are independent one from another. This brings the following pitfalls to the system uptime and performance:
- Fraud potential. No network member can access the whole database and verify the transaction eligibility;
- Uptime vulnerability. It’s hard to predict the uptime of every independent subsystem and time when it will go into downtime;
- Data integrity issues. When you split data into several databases, the issue of subsystems integration arises;
- Technological stagnation. Conventional DB approach still requires a lot of manual approvals and verification. It significantly slows down the internal processes.
As you can see, the traditional solutions introduce a set of critical issues to the insurance software. With that said, let’s find out how blockchain technology address the latter.
1. Fraud Reduction: Eliminate Abuse Opportunities
The most glowing example of the insurance system abuse is the claim for the coverage of absent therapy. The client asks to repay for the healthcare that never took place in real life. Let’s be honest, you can hardly deny that verifying the actual fact is tricky. There are numerous ways to fake proving documents.
Here’s why this is crucial: these cases happen in numerous market sectors: from marine shipments to the natural disaster claims. These lead to substantial company losses.
Decentralized ledger technology deals with an issue by providing a holistic data source, where you can connect data from different subsystems. With the DLT, it’s a no-brainer to verify the therapy existence and make an instant decision about the coverage.
Now, imagine implementing the AI over the blockchain infrastructure. This is where the system literally becomes smart. Insurance software can now not only prevent fraudulent activity. It also predicts the potential abuse cases and saves time for their timely resolution.
On balance, blockchain development outsourcing can greatly impact your insurance fraud rate.
2. Claims Settlement Acceleration: Timing And Accuracy Mean Performance
Delivering timely claim settlements is crucial to the insurance company reputation. It implies that insurance software has to make a clear, fast, and considered decision on the claim rejection or settlement. This is where the smart contracts of the blockchain solutions come in handy.
Our Financial Technology experts at Gravum believe the DLT can become a number-one priority in the insurance software development. Here’s the thing: once the blockchain network receives a claim – for a hurricane, earthquake or a firestorm – it evaluates the disaster parameters with oracles.
The network oracles are the instances responsible for external data gathering. They collect information from different open data sources. This way, the software can precisely figure out whether the case is eligible for the coverage. And the incredible part is this happens in seconds.
On the whole, whether you plan to order your blockchain development outsourcing in Ukraine, the USA, or anywhere else, this will bring an immense performance and security boost to your insurance software.
3. Underwriting Automation: A Key to Instant Transactions
The insurance industry has vivid detail: most insurance cases need a standardized approach. This includes the static set of verification processes. These can be fully automated by blockchain solutions.
This is how it works:
- The plane departure is delayed or canceled due to technical reasons. This is an insured event, so you can claim the coverage;
- DLT system detects a flight delay or cancellation in the flights database;
- Blockchain network uses the data from oracles to find the customers eligible for compensation;
- The system verifies the identities by the basic user data provided upon account creating;
The software automatically pays out the losses.
There is one more fascinating thing about automation. It is close to impossible with the conventional data storage and processing approaches to do the same. Blockchain opens truly tremendous opportunities for insurance software optimization.
The Bottom Line: Blockchain Solutions for Insurance
The blockchain integration into the insurance software provides benefits for both companies and consumers. Enterprises receive a convenient way to organize their data, make it clear and structured. Consumers get a quality user experience through more trustworthy opportunities for their insurance needs. We all know how complicated it can be to obtain payout in the car accident case. This is why transparent blockchain systems can conquer the insurance segment.
From the reimbursement issuance of the marine cargo to the drugs and pharmaceuticals coverage: DLT insurance software unleashes the decentralized network abilities. It lets us see this market sector from another perspective.
If your insurance software needs the blockchain technology, drop a line to our DLT professionals at Gravum. We provide quality blockchain development outsourcing in Ukraine and always strive to make IT-world a better place. Draw upon our Blockchain solutions expertise, take a giant step towards your product success.