The insurance industry has been working hard to stay up to date with modern technology. Already the industry is making use of predictive analytics to help create customized plans.
This raises the question of how blockchain technology can help the industry. A blockchain is a way to securely store information. The highlight of this method would be the inability to change data once it has been established. In other words – hacking and malicious attempts at alterations will not work.
Smart contracts are but one of the ways that blockchain data and car insurance companies have found a perfect balance. Contracts are a part of daily life – especially for insurance companies. A smart contract is simply a more advanced version of the original.
In this instance, they are digitally signed and stored through secure digital means (blockchain data). All parties involved in the contract, including the neutral third party, can access this data.
Due to the digital nature of smart contracts, it allows for a certain amount of automation. A computer can look at the contract, and if the terms have been met, activate the appropriate next step.
Advantages of Blockchain Data
Many advantages come from blockchain technology, including the information already mentioned in the section above. Digital contracts allow for ease of access – both for the insurers and the insured.
In turn, this helps erase confusion, increase communication, and, more importantly – ensure accurate information. For example, fraudulent claims will dwindle, as all relevant data will be stored in one location. To put it another way, it’ll be simpler than ever to catch fraudulent claims.
The customer will also have higher levels of protection, as the data will be stored with a neutral third party. This will help ensure that the insurance companies hold up their end of the deal and leave avenues for when things do not happen according to plan.
Insurance companies can use this ready access to data to store client details, going beyond what is typical these days. Data such as driving habits, traffic records, and accidents can all be easily (and safely) stored in one location.
While that may not sound like a significant advantage – it is. All of the data being in one place would further encourage customized plans, which would once again benefit both parties.