The insurance world is preparing for the traceability revolution via blockchain. Let’s learn concepts about it, which will affect us sooner rather than later.
Blockchain, is the technology that underpins bitcoin, ethereum and other cryptocurrencies, finding its way into the insurance industry enabling everything from verifying claims to preventing fraud.
Blockchain’s Role in Insurance:
Smart Contracts: Blockchain’s smart contract functionality automates claims and underwriting processes. Smart contracts execute automatically when predefined conditions are met, removing the need for intermediaries. Policyholders can receive payments faster, and insurers can reduce administrative overhead.
Immutable Records: Data stored on a blockchain is immutable and tamper-proof. This ensures the integrity of policies, claims, and other crucial information, reducing the risk of fraud.
Transparency: All parties involved in an insurance transaction can access a shared ledger, which increases transparency. This transparency can help in reducing disputes and ensuring fair resolutions.
Fraud Prevention: Blockchain’s decentralized nature and consensus mechanism make it difficult for fraudsters to manipulate the system. Claims can be verified quickly and efficiently.
Parametric Insurance: In parametric insurance, predefined conditions trigger automatic payouts. Blockchain’s smart contracts are ideally suited for such policies, ensuring swift claims processing in cases like natural disasters.
Proof of Insurance: Blockchain can enable proof of insurance on a shared ledger, reducing the need for physical documents. Law enforcement, regulatory authorities, and other stakeholders can verify insurance status instantly.
A certificate of insurance (COI) is a document from an insurer to show you have business insurance. They’re also known as certificates of liability insurance or proof of insurance. Under the blockchain, these certificates will be faster to obtain, accelerating insurance entry and exit processes.
Reinsurance: The reinsurance process can benefit from blockchain by streamlining data sharing between primary insurers and reinsurers.
Subrogation: When one insurer seeks reimbursement from another due to a third party’s liability, blockchain can streamline and automate the subrogation process.
I am convinced that through BELOBABA we will be able to offer this type of insurance services, so that our clients and future new clients can approach the world of insurance, in a better, easier and more accessible and, above all, more dynamic way, through of the blockchain.