Insurers increase blockchain adoption
11-10-2022 12:47:00 | by: Bob Koigi | hits: 2276 | Tags:

In the same way that blockchain technology has impacted other sectors of the traditional economy; the insurance sector could not be left out.

This innovative technology offers insurance companies the possibility of executing processes without errors based on the transparency and security that this network shows and the creation of products that revolve around users' needs. Go to one of the trusted cryptocurrency exchange platforms where you can buy bitcoin.

The blockchain has positioned itself at such a level that many of the experts in the area of systems often suggest that it could become the leading platform for the new way of trading products, goods, and services, in collaboration with other technologies such as Artificial Intelligence, the metaverse, and the internet of things.

The tokenization of insurance companies

As is already known, the blockchain arises from the hand of Bitcoin; it is a platform that can follow each of the operations carried out through the network in a permanent and verifiable way.

It is known as the accounting record book, where all the operations that are carried out are stored, which generates confidence and security in its users, in addition to the fact that only the parties involved are in charge of approving the operations that are executed there and in turn track their status.

With the automation of the processes through the use of the blockchain, operational costs can be reduced; consequently, the platform can carry out the operations unequivocally, requiring only a supervisory user.

An innovative solution that a group of startups is using has created their tokens to develop their capital by offering much more accessible services in which they can multiply their initial wealth through crypto investments.

The reduction of paperwork and endless procedures is the main objective of insurance companies that, beyond a database, are searching for an accessible and reliable platform for all parties involved.

Benefits of using blockchain in insurance companies

Consequently, these types of companies are responsible for safely managing physical assets. Still, digitally, using the blockchain, they contribute to executing processes from a systematized and automated perspective, where requests, whether for policies or claims, are performed through smart contracts.

This type of technological tool contributes to the acceleration of processes. At the same time, a permanent audit follow-up is developed, thus avoiding possible fraud in the market.

Smart contracts offer this type of company benefits in various situations because all the processes carried out on paper are taken to the digital level, achieving transparency and avoiding the bureaucratic processes that always hinder the development of activities.

Typical uses of the blockchain in the sector

Insurance companies have diversified their operations significantly, so much so that automation in this sector has become essential and that is why some of the frequent uses of technology in this sector of the world economy are listed below.

Detection and prevention of fraud and risks:

Even though companies in the insurance sector have invested in anti-fraud technologies, losses are always generated per insured, which indicates that the system's manipulation makes the management of these companies vulnerable.

For this reason, the use of the blockchain reduces this type of activity since registered operations cannot be modified, which strengthens trust and security.

Shared registry for reinsurance:

In the face of a risk situation associated with natural disasters, it is usually quite cumbersome when processing the policy. Everything is kept in manual records, which leads to long waiting times.

With the use of the blockchain, the shared registration of information is allowed, through which the updating and exchange of information by those involved are allowed, reducing costs and time.

In processing health insurance policies through the interconnection of data with the available services and the clinics or medical services that can assist the insured, as well as in the case of vehicle accidents.

By the year 2023, with the use of this technology, the insurance market could be increased by a proportion more significant than 85%.

All this is due to the need to have security, transparent and reliable systems that guarantee the execution of the guaranteed budget in an efficient manner and at the same time with lower costs that will allow growth at a global level.