ORLANDO, Fla.—We now have been hearing about Blockchain and Cryptocurrency for a while. Everybody talks about it coming, “it’s the future” they say, but do we really understand how it is affecting insured businesses?
Here’s the thing, the year 2017 marked a significant change in everything related to cybersecurity regulation. The Equifax breach and a flaw in microchips, brought cybersecurity to the top of the insurance regulatory agenda. The impact of technology and innovation on how the insurance industry functions and services its customers will continue to be an area of focus for regulators and the industry broadly.
In 2018 the focus is placed on biometrics, moving beyond passwords to use more secure alternatives like fingerprints and facial recognition, but the use of biometrics as a better solution has brought its own issues. Some states have already worked and some others are in the process of considering legislation to regulate the collection, use and retention of biometric data.
Insurers in the other hand, are making progress understanding how blockchain solutions may offer opportunities to cut cots and improve service. Currently, blockchain is in the early stages of adoption but it is being viewed as a very promising solution to the challenges mentioned above.
Eliminating suspicious and duplicate transactions by logging each transaction and making it more difficult for hackers to corrupt and steal files. It does verify the authenticity of customers, policies and transactions by providing historical records.
Larger Amounts of Data
Blockchain can manage, share and monetize larger amounts of data in an era where a multiplicity of devices is needed on our day-to-day lives. The data is registered by creating a digital fingerprint using a date and time stamp which provides both security and transparency. Streamlined data can also make risk assessment timelier and more accurate.
Reduced Administrative Costs
Blockchain can handle the increase in third-party transactions and claims made through personal digital devices and helps reduce administrative costs through their automated verification.
Real Time Contracts
Insurance companies can now save time and money, while providing their customers a better experience connecting real-time information from multiple systems that trigger claim payments and reimbursements, faster and with greater accuracy.
Accurate Reserve Calculations
This helps property and casualty (P&C) insurers who need to know how much money is available as they pay claims. Blockchain can ensure that they are rebalancing their exposures against specific risks. Insurance companies can now feel confident in their daily business operations.
In an era of innovations such as mobile apps and robo-advice models, blockchain stands out as a more foundational or architectural development. In that sense, blockchain may support, and subsequently drive, increased use and broader adoption of the many other digital innovations that have helped reshape the Property & Casualty landscape.
As higher levels of trust are established between the insurer and the insured, stronger relationships will be built as well. 2018 was expected to be a breakthrough year for this technology.
For personal insurance solutions check out our sister company Orlando Insurance Center