Insurance 2.0: Reshaping the Industry with Blockchain

The insurance industry with $1 trillion premiums per year is a titbit for crooks. The FBI report estimates the annual losses of insurance companies caused by cheaters at as much as $40 billion. And this is only speaking of non-health insurance.

Blockchain-powered software can come in handy here. First, it is reliable because no data stored on it can’t be forged or deleted. Second, it is nearly impossible to hack. And lastly, its smart contracts can automate a huge volume of work. Keep your eye on the details described in this post.

Checkup of Claims History

Usually, insurance companies record the history of claims to prevent possible cheating in the future. Once a new claim is submitted, an insurer checks whether the same person has already submitted any similar claims earlier. If yes, this is a potential fraud case that requires a more detailed investigation.

Blockchain-led smart contracts can do this work automatically and deliver results immediately. Just imagine how much working hours it can save for a single company! Moreover, if all the insurance companies use the same blockchain, this checkup can be done through the aggregated distributed ledger, which will give more reliable results. This way, all the companies will benefit from employees only accessing aggregated data insights, with no need to go through loads of raw data on their own.

Benchmarking Against the List of ‘Suspicious Loss Indicators’

The National Insurance Crime Bureau (NICB) compiled a list of suspicious details pointing to a possible scam. The file contains 39 pages of such indicators. Understanding whether the listed points are applicable in each exact case requires investing some hefty time. In comparison, smart contracts can benchmark the current case details against the list provided by the NICB in less than a second.

Analysis of Executors

Not only claimants but executors as well can cheat. For instance, a hospital or a car repairing company can easily ascribe some unnecessary services to the bill or just occasionally jack up their prices.

What can blockchain do in this case? First, it can analyze the historical solutions of the analogous claim. In case of a great discrepancy between the historical bills and the current one, blockchain-driven smart contracts can alert the insurance company about the potential risk. Second, if blockchain keeps the pricing of all the applicable executors, no tricks with price fluctuations can be possible. In addition, smart contracts can trigger payments to authorized agents on the successful task accomplishment.

Matchup of Claims Submitted to Different Companies

Imagine a person with a chronic disease who can’t pay treatment bills. The likely way such a person can cheat the insurance company is to imitate an accident injury and got paid by the insurer.

Blockchain can prevent such cases by aggregating databases of different companies, including hospitals, car repairing businesses, insurance companies, and others. Once a person claims any of the agents which databases are stored on the blockchain, this record becomes available for checkups by any of the companies using the same system. Then, when the same person tries to get the insurance payment for an allegedly legit injury, blockchain-supported smart contracts will trigger rejection.

How to Disrupt the Insurance Industry with Blockchain

The innovative blockchain-driven approach to the claims analysis will allow insurance companies to save time on carrying out their routine checkups. Smart contracts can execute most of them automatically, spending just seconds on accomplishing them.

In addition, it is extremely important that blockchain can securely connect databases of different companies, with the authorized access only to the analysis results but not to the raw data.

The next step here is to unlock the blockchain opportunities for insurance companies by introducing new blockchain-powered solutions that could make this functionality a reality. The genEOS blockchain platform will allow developing such solutions cost- and time-efficiently. It has such integral features as decentralization, user permissions, and smart contracts. So, you can just encode this functionality into your software and start using it with no extra efforts on developing it yourself.