The insurance industry is a big industry in the world. We cannot think about a day without insurance. In our day to day transaction and World globalization business based system we need insurance in every sector. Decentralized insurance platforms are more transparent and efficient than the traditional insurance system. By decentralizing the traditional insurance model, a lot of issues related to the traditional insurance system lack transparency, high cost and lack of efficiency can be resolved.
Decentralized insurance platforms utilize blockchain technology and smart contracts to automate and manage insurance policies and claims. The traditional insurance companies mostly depend on the centralized ownership authorities but the decentralized platforms distribute these tasks across a network of participants. This decentralization reduces the need for intermediaries, potentially lowering costs and improving efficiency which is the beauty of the decentralized system.
Smart contracts, self-executing contracts with the terms directly written into code, play a crucial role in decentralized insurance. These contracts automatically execute claims when predefined conditions are met. The total system is automatic and ensures that payouts are prompt and free from human error or manipulation. For example, in a flight delay insurance policy, the smart contract could automatically trigger a payout if the flight is delayed beyond a certain threshold.
If the data is collected from the proper sources then it will be good that you can understand. Decentralized insurance enhanced transparency. Blockchain's immutable ledger ensures that all transactions and contract terms are recorded and accessible to all parties involved. This transparency reduces the risk of fraud and increases trust among policyholders.
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VEIGO (Community Mod)
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