Blockchain is a technological breakthrough that will change the health insurance industry. It will allow communication avenues to be more transparent between insurance carriers, medical facilities, and consumers. Fraud cases will also become less common because the system will compile a public ledger on every person, allowing anything out of place to be seen and investigated before a payout is made accidentally. The Coalition Against Insurance Fraud shows that 10% of claims are fraudulent, for a total of $80 billion being stolen from companies.
This technology will improve the industry in a few vital ways. As the technology becomes more advanced the industries using it will find that it saves them time and money, as well as saving their customers time and money. There are four main areas that will change the insurance industry, with advancements on the horizon.
- Claims-Processing claims will be much faster, and easier because the public ledgers connect to each other. This allows insurance carriers to view medical records, and records from other pertinent information, such as police reports or fire inspections, that will connect all parts of a claim into one easy-to-see area. Normally paperwork congests information so much that claims take a long time to finalize. Blockchain will effectively eliminate the “paperwork crisis in the industry”. It will not matter what type of insurance that you have. Pregnancy insurance, traveler’s health insurance, basic health insurance, etc. All the policies will be able to connect with information available on the ledger.
- Efficiency-Claims are not the only part of health insurance that will be improved. Getting a policy will become easier and more streamlined by using smart contracts. Smart contracts allow an insurance agent to type in the information from a consumer and the system will take over. It will take the information that is inputted, compare it to set guidelines that have been programmed in, and it will make decisions based upon all the information that it compiles. The system will match the information given to the information found on the ledger to verify the accuracy. From there a decision will be made, and a premium and contract will be offered.
- Automation-A big factor that blockchains will bring to the insurance industry is the automation of all the processes involved. Policies, claims, and payments will all be completed through one program. It increases the speed at which everything can be done. This will decrease the amount of time that will be given on one policy, which in turn will allow premiums to become less. Time saved by the agent means cash saved by the consumer.
- Trust-Insurance companies are built on trust. Blockchains are almost fraudproof, which means costs of premiums will not have to go up because of money paid out that should not have been. With everything being in the public ledger, with all parties that need access having the ability to read, fraud claims will almost be impossible to be authorized for payment. This will build trust between the insurer and the policyholder. Trust means that consumers will continue to use them for their insurance needs, as well as referring others.
Blockchains are the technology of today for companies of tomorrow. Being able to streamline everything, and have open communication with other parties, will have a huge positive effect on insurance companies that use it. Currently, an issue with local privacy laws is holding the widespread use of this system back, but soon everyone that wants to continue operating a successful business will use blockchains. Consumers that want fast service will demand it, and fraudulent claims that do go through the cracks will be easily prosecuted because of the information available.