Blockchain is a distributed ledger that is broadly discussed as a technology with huge innovation potential in all areas of financial services. To date, the majority of usage cases of this technology are in the banking arena. We can refer to several publications available on Initio’s blog regarding the impact of blockchain technology and the usage of crypto currencies in financial services.
However, the blockchain technology also offers potential use cases for insurers that include innovating insurance products and services for growth, increasing effectiveness in fraud detection, pricing and reducing administrative cost. In these application areas insurers could address some of the main challenges they are facing today – such as limited growth in mature markets and cost reduction pressures.
While the insurance industry (in terms of technology adoption) lags behind banking, it is nevertheless uniquely positioned to benefit from blockchain technology. Blockchain can address the competitive challenges many incumbents face, including poor customer engagement, limited growth in mature markets, and the trends of digitization. In the following, we will outline one of the most promising insurance-related use case that will increase effectiveness and reduce cost by automating key processes
For several years, the Belgian insurance market was behind on the digital revolution while banking sector had been working hard in digitalizing their services across entities and platforms to meet the demand from users for a full digital financial experience. Insurance companies have been delaying this evolution while controlling their risks and focusing on their profits. The digital evolution was mostly aimed at improving the digital process for their main selling channels: brokers and banks. They have therefore developed platforms to ease the process for subscriptions, customer management, financial integration and reducing paper works. In addition, some companies have developed mobile applications allowing users to see their insurances or contact their company for claims. These applications did not meet the expected success amongst final customers and are not even updated to follow the actual digital market trends.