There is the potential of the blockchain technology disrupting the insurance industry and change process claims, the way we share data and prevent fraud. https://www.vernam.com/ will use the blockchain technology to make sure that the insurance sector is on the same level with other sectors that have already embraced the technology. We are not yet on wide scale adoption but we are heading in the right direction. VERNAM will ensure that the insurance industry works with industry experts and regulators to come up with the best ways for the industry. VERNAM has already tested new ways to utilize the blockchain technology with an internal process to enhance learning as the technology matures.
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What is a blockchain?
A blockchain can be defined as a peer to peer ledger of blocks that are incorruptible. The blocks are simply records. Every record or block links to another block and has a date and time stamp. The blockchain can manage itself. It doesn’t need an intermediary. I totally believe that the blockchain is going to impact the insurance industry.
Can the blockchain disrupt the insurance industry?
I am not an expert on these matters but before writing this article, I spoke to various experts and read more about this technology. The blockchain will disrupt the insurance industry in the near future. We can say now that the blockchain is not mature yet but it is very clear that the blockchain is evolving at a faster rate. It will have a significant impact on the insurance industry. Here is how the blockchain will impact the insurance industry.
Improve trust
Trust is one of the main goals of VERNAM. Currently, there is a crisis of trust in the insurance industry. We can say that banks are the leading institutions when it comes to issues with trust but trust is something that impacts all businesses. Even before you go to your nearby shop or supermarket to by a pen, you must have some trust that they will sell you a functioning pen at a fair price. When there is no trust, there are high costs and inefficiency as long as the insurance industry is concerned. Most people don’t take insurance covers even when the likelihood of the risk happening is high because they don’t trust insurance companies. VERNAM will use the blockchain technology to build the trust of consumers. This is because the blockchain provides transparency.
Enhance efficiencies
Have you changed your insurance company lately? If yes then you probably know that there are a lot of inefficiencies when it comes to entering your data into the database. Customers always want to have control over their personal data and they feel insecure when they no longer have control of their data. VERNAM comes with a solution to use the blockchain technology to make sure that there are no inefficiencies and that personal data is controlled by individuals. The verification of the data will be registered on the blockchain.
Smart contracts will improve the process of processing claims
There are issues concerning the insured and insurer that could be solved by the blockchain technology and the smart contracts. Insurance contracts are typically long and confuse the insured. Insurance companies, on the other hand, are busy battling the problem if fraud. Smart contracts and the blockchain technology will help both the insured and the insurer to manage claims in a transparent and responsible way. VERNAM will use the technology to record and verify contracts on the blockchain. After submission of a claim, the blockchain will ensure that only valid claims are paid. The blockchain will detect if there are multiple claims submitted for the same accident. After meeting certain criteria, the blockchain will then initiate the payment without any human intervention and this will improve the whole process of claim resolutions
Prevention of fraud
The investigations are currently underway to use the blockchain technology to detect and prevent fraud. Five to ten percent of claims made to the insurance companies are fraudulent and insurance companies are losing a lot of money to fraud. Blockchain in future will be used to verify customers, transactions, and policies. For this to be successful there should be a good collaboration between customers, insurers, technology experts and other parties.
Website https://www.vernam.com/