Blockchain technology has been described as one of the best inventions since the internet. It allows value exchange without the need for trust or for a central authority. Many people assume that when we talk about blockchain, we are talking about cryptocurrency (for example, Bitcoin), but it actually has far wider uses including insurance.
At Insure Now, we have answered some frequently asked questions about blockchain.
What is blockchain? How does it work in the Insurance industry? More importantly, how do you benefit?
What is Blockchain?
A Blockchain is a decentralized, distributed and public digital ledger that is used to record transactions across many computers so that the record cannot be altered retroactively without the alteration of all following blocks and the collusion of the network. For example, if you were to change your address as a policyholder, your details would alter across the entire chain. If the change in address affected the price of your premium, it would alert the insurer to amend your policy which updates everyone from the insurer to you. Instant and accurate. That’s the power of Blockchain.
How does the Blockchain work in the insurance industry?
How do you benefit?
The insurance industry is dominated by companies that have complex system architectures, including legacy systems, built up over decades. This leads to differing processes across all insurers and intermediaries, causing unnecessary inefficiencies and costs.
Blockchain offers greater speed and quality of data transfer. This radically improves processes and delivers major costs savings which means cheaper premiums for you. Blockchain also allows insurers to develop new distribution models based on lower distribution and administrative costs, which again helps keep costs down and improve premium rates.