What is the biggest challenge in purchasing insurance nowadays? Figuring out which insurance you need to get and how to get it. While finding suitable insurance is challenging, getting it seems even more difficult. The process is so complicated that people hire advisors to guide them through the purchasing process. On paper, buying insurance should be simple, which is the reason why people are frustrated about purchasing insurance. Hopefully, blockchain technology has a solution for every problem in the world. In this article, we will delve into how blockchain technology can revolutionize the Insurance industry by making buying insurance more straightforward for everyone.
So, what’s the deal with insurance these days? What’s the real problem?
Right now, ask yourself, do I know the details and regulations of insurance? What is the best insurance for me? After asking yourself these questions and questions alike, you feel that there is a massive gap in your head, and you have a hard time understanding how insurance works, let alone the policies. Isn’t this the most prominent problem you can face when you want to buy insurance, specifically life insurance? Once again, it is necessary to point out that this process doesn’t need to be complicated, but whose fault is it?
Part of the fault is due to the nature of the insurance industry. Rendering the data sufficiently enough for a life insurance case presumably takes a considerable proportion of time. We also must consider the effort needed to gather the data and keep it safe and accurate. There are numerous cases of health insurance in which unreliable or partially inaccurate data has caused problems for patients and insurance companies. One notable example of wrong data causing a scandal in the health insurance sector in the USA is the case of WellPoint, which occurred in 2010. Which technology can help with processing data and its safety?
We are not to blame on the account of no education is available in Insurance policies
Most people have to do a lengthy online search on Google before they get a grasp of what an insurance contract is. More education related to getting insurance in our schools is needed. So, young adults have to seek asylum on platforms like YouTube to get guidance. But how reliable is the information you see on the web or YouTube? It’s crucial to remember that not all information is created equal. When seeking advice online, it’s essential to be discerning and cautious. Don’t fall for the empty promises of false advocates.
Another problem is that we need to figure out why we need insurance. We just know that we need it. It has become like an innate desire, but we are still baffled by it. Make no mistake; we are not trying to imply that insurance is a fraud created by the government to take more money from honest taxpayers. What we are suggesting is that one needs to clarify one’s desires before acting on them. So far, we established that there is no real education in insurance. The government knows this issue, so what are they doing to ease the process?
The government is doing its part
While many healthcare institutions are worried about the Health Insurance Portability and Accountability Act (HIPAA), the government has established policies that help ease people’s buying insurance process. The most important policy is the Affordable Care Act(ACA). With the help of ACA, an insurance marketplace has been established in which customers (at this point, we are customers) can compare different insurance plans and choose the most suitable for their unique condition and needs. Another positive point of ACA is that it requires insurers to provide standard information. The aim is to bring more clarity to the process. Is there another way to increase clarity, security and reliability more efficiently?
Once Again, Blockchain is here to save the day
While we have to honestly believe that blockchain can compensate for the shortcomings of the insurance industry in terms of clarity, safety, ease of access, and accuracy, we are not just making a bold statement. Blockchain technology can solve all of the aforementioned problems and increase efficiency simultaneously. Now, let’s explore how blockchain can save us from all the misery caused by buying insurance.
Clear the Confusion with Blockchain Technology
For confusion to be solved, the process needs elements or, better said, protocols that enhance clarity. Blockchain technology has this ability. As we established in the previous part, gathering all the documentation a patient needs is challenging. For example, gathering medical history and other documentation can be difficult for people who want to buy life insurance. The next step is verifying the data, which is time-consuming.
Blockchain allows users to gather their data in one block, which will be validated. Before we even delve into details, you can sense that using blocks can make transactions much more accessible. Blockchain validates users’ information by comparing it to the information already available on their medical record block. Users must update their information for life insurance cases, which requires human interaction and time. The Blockchain can automatically trigger an ID card, new member information, etc. Even routine record maintenance, such as address changes or beneficiary updates. We cannot deny that young adults nowadays prefer to use blockchain networks as they find it interesting.
Simplifying the application process by making it more client-centric
A remarkable 70% of those buying through the employer felt this comfort, usually through group life insurance that involves very little individual underwriting. The indication, therefore, is that the smoothness of this sort of group life insurance takes away most of the stressful feeling associated with getting personal insurance coverage.
the most relevant development in this regard is presenting a more accessible and comprehensive set of medical records on the blockchain, which would further this process even more. In this respect, blockchain technology will enable insurers to develop a secure and transparent environment in which applicants’ medical histories can be accessed conveniently. This could make what is arguably viewed by many as an intrusive, discouraging process both comfortable and clear of interference. Another benefit of moving to a blockchain-based system is that more insurers could directly relate to their clients, thus supporting a more comprehensive array of consumer-driven purchase options. The ability of blockchain to confirm and conduct transactions without institutional intermediaries may portend new arrangements on the part of consumers for the purchase of individual life insurance.
This is where blockchain can come in and make the application process for insurance considerably less complex and painful. It can compress the average application and underwriting timeline of 45 days to near-real-time, encouraging more prospects to start and complete their applications. It can decrease costs by limiting the time and tests required and introducing disintermediation into distribution. Using blockchain, the decentralization aspect heightens standards for data security and privacy of sensitive personal information. It also extends the usage to online navigators and the P2P insurance exchanges by making a more friendly environment.
By making ongoing underwriting and real-time price estimates possible, blockchain enables the establishment of a less arbitrary and much more up-to-date pool. This capability allows insurers to provide service offerings that reduce risks and improve the general health and longevity of policyholders. The result is to drive revenue growth and policyholder loyalty, making them feel valued and serviced. It can also offer more personalized, individualized cover based on real-time data insights, learning more about policyholders and adjusting offerings accordingly.
When Blockchain Comes, Fraud Leaves
This is a major problem, costing the industry over $80 billion annually. One significant application of this technology in fighting fraud is probably within the insurance industry. For instance, a health insurance company might connect a submitted claim to a patient’s interoperable health record on the blockchain, showing proof that the patient was treated for the condition in question. Similarly, a life insurance company might cross-reference pieces of a candidate’s health history, such as cancer treatment or tobacco use status, and public or work records to validate applicant-submitted information.
By weaving analytics into the blockchain, organizations can examine their data and the market to develop models that systematically identify systemic waste, fraud, and abuse. The insights gained can then be distributed among other insurers as an encouragement to fraud prevention. In life insurance, blockchain will help avoid fraudulent cases by people with relevant information on critical data. Blockchain can prevent and reject spamming claims by increasing data sources without human intervention. This increases speed in the claim verification process and efficiency in general operations.
Overall, integrating blockchain technology into insurance might wholly change how applications are handled, improve consumer comfort, and greatly reduce fraud. Such a move would go a long way toward living in an ecosystem where the greatest challenge is one that is more efficient, safe, and customer-centric.
