Managing an insurance business can be quite overwhelming for insurance providers. They have to process insurance claims, assess risk, and manage and prevent fraud while complying to set rules and regulations. Handing these intricacies can be tedious, a major reason why insurance companies are looking into new technologies to come up with practical solutions.
Technologies such as blockchain and AI can help address most issues involved in the insurance business. For instance, blockchain can be used to build automated payment systems while AI can prevent potential risk and fraud, and come up with customer-targeted marketing methods. Combining these two technologies can boost overall productivity, prevent fraud, and ensure a better customer experience.
Blockchain is a distributed database shared among different computer network nodes. Blockchain stores information in digital format and is famous for creating cryptocurrency systems like bitcoin. This technology can be used to maintain secure and decentralized transaction records because it guarantees fidelity and security of data.
Organizations like the Agriculture and Climate Risk Enterprise based in Nairobi Kenya are leveraging the power of blockchain technology to create efficiency in processing insurance claims. With the help of smart contracts, insurance providers can automate claims by coding specific business rules. A report by BCG suggests that insurers can save over 200 billion per year in operating costs by using smart contracts.
Additionally, blockchain-based ledgers can help manage every physical asset digitally. This can be achieved through asset tracking with the assistance of a decentralized network. Owners can register their assets on the blockchain network and each node will have an immutable record of the asset. A transfer of ownership to another party will be recorded on the network. Through this, every new owner can trace back the previous owners. Using this approach in insurance can make asset tracking bliss and provide proof of ownership.
However, blockchain in insurance can reduce the time insurance providers spend on processing and verifying insurance claims. The use of blockchain in the insurance industry will only continue to rise as research by Gartner indicates that this technology will generate 3.1 trillion in business value by 2030.
Insurance providers can deploy Artificial Intelligence (AI) to automate the underwriting process. The purpose of underwriting is to analyze risks associated with insuring customers and their assets. Assessing this risk depends on the information provided by customers, which needs to be verified for legitimacy.
Therefore, underwriters may gather extra information from sources like SEC filings, social media, and many more to enable proper risk assessment.
Since this process requires analyzing large volumes of data, AI can be deployed to collect and analyze customer data from different sources. AI systems can do proper analysis and generate accurate customer analytics. The use of AI in insurance can make underwriting more precise and efficient.
Using technologies like blockchain and AI in insurance can address major problems while creating efficiency in certain procedures like claims processing, marketing, and underwriting.
WATCH OUR WEBINAR ON INSURANCE DISTRIBUTION:
Curacel helps insurance companies optimize claims processing manual efforts, providing 75% productivity improvement with 99% accuracy.
Find out how your organization can successfully migrate to digital-first over the next five years. Visit curacel.co for details.
Subsribe to our newsletter to receive weekly content