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Blockchain has incredible potential in the insurance industry. At the fundamental level, it allows the transfer of value to an immutable record preservation technology, which could increase efficiency at all levels of the insurance value chain.
Insurers and brokers can use blockchain technology to transform the way they manage, process and store data. Commercial transactions can be conducted between the parties in real time, with much more certainty and lower costs.
Going forward for brokers, blockchain is a story of optimization and efficiency, according to Bundeep Singh Rangar, CEO of the financial software company PremFina.
"Take the example of a broker who sells home insurance … See what's happening at home regarding smart meters and IoT-related devices that collect and record home data" , he has declared. "Homeowners can have smart meters that monitor water leaks to prevent water damage and aerial monitors that can collect high levels of carbon monoxide and prevent potential fire damage.
"All data points recorded by smart meters and IoT devices can be kept on the blockchain. Over time, this will allow a more efficient pricing of a person's home insurance based on the data they provide on their home. The data stored and recorded on the blockchain are very transparent and indisputable and can allow a more personalized insurance service. "
Customers want to be reassured that they are at the center of their insurance transactions – the centrality of the customer has always been a key value proposition of the insurance broker and, armed with a blockchain-based data profile, they will be able to improve this proposal and increase efficiency in the broker / carrier relationship.
"Theoretically, one could end up with a situation where an individual collects an insurance rating, like a rating, on the blockchain," said Rangar Insurance Business . "When brokers approach markets with such information, it will be a much more efficient process.
"It will also allow the broker to find the best possible option for the consumer, because insurance companies can use blockchain-based insurance ratings to create personalized and tailor-made insurance policies for people." It's a win for everyone. "
This personalized transaction between the insurer and the insured "requires someone in the middle", which is where the broker of the future can thrive, Rangar explained. Consumers can create these blockchain data profiles, but that does not necessarily mean they understand their data and how it relates to insurance requirements.
"Insurance optimization is becoming much more made of data acquired through electronic and telematic sensors", he added, "which are then stored, recorded and shared via the blockchain, where data can not be altered or disputed. "
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