The world is collectively in search of more open, trusted, and secure IT systems, and the distributed ledger technology behind the blockchain is now ready to serve as a shared infrastructure with the potential to transform multiple processes across the insurance value chain.
Cognizant, the leading multi-national firm aiming to transform business, operations and IT models for the digital era, has published a new report entitled, ‘Blockchain: A Potential Game-Changer for Life Insurance.’ Cognizant introduces blockchain as a tech solution that promises to become a critical component that helps form the core of nearly every aspect of business and personal existence.
In its 2016 report on emerging technology trends, the World Economic Forum highlighted blockchain as the conceivable new ‘beating heart’ of the global financial system, predicting that blockchain will account for 10% of global GDP by 2027. Blockchain is a shared, distributed ledger that offers non-repudiation of transactions when an absence of trust exists across a peer-to-peer network. Last year saw an excess of USD 1.4 billion being poured into blockchain technology globally across various domains. This sum is primarily attributable to investments in a wide array of start-ups that operate within the healthcare, finance and supply-chain sectors.
Even insurers have boarded the blockchain-train and are exploring the full range of potential solutions presented by blockchain. One example of a start-up offering unique solutions for blockchain is Teambrella, the highly disruptive person-to- person (P2P) model that enables groups of individuals to provide insurance coverage for themselves without the need for an intermediary. Another prime example is Helperbit, a start-up specialised in the provision of micro-insurance for humanitarian aid.
To examine the potential role that blockchain could play in insurance, Cognizant has composed a new white paper. The recently published paper explores the ways the tech could theoretically help life insurers to simplify death claims processing, a process that currently requires the beneficiary to undertake a time-consuming activity just to process basic claims. The report looks into the possibility to use a blockchain-based solution to combine the current death registration and the death claims processes into a single, simplified procedure that requires minimum intervention from stakeholders.
In addition to its evaluation of claims processing, this white paper also analyses the options that life insurers have for adopting and creatively leveraging blockchain in order to ensure auditability, to facilitate automation of reinsurance claims, and to process subrogation claims payments. Considering its proven potential to transform business processes and models, blockchain and distributed-ledger technology present an opportunity for organisations to gain substantial competitive advantage.
To read or download a PDF copy of the complete ‘Blockchain: A Potential Game-Changer for Life Insurance’ report by Cognizant, please click here.