If you are not familiar with Blockchain it is a quite simple concept that has huge implications for industries all over the globe, including automotive insurance. It is a public ledger that all people on the system can view. It is different from traditional ways of storing data in one important way. Blockchain is made up of a group of blocks that form themselves into a chain.
As information is entered into the system it is stored in a block. Once that block is full it will attach itself to the previous block in a chain, linking all the information forever. This technology makes it easy to access information for the companies that need it, and it is virtually impossible to change any of the information once it has been entered.
When it comes to car insurance it can help the industry in numerous ways. Since you now have a basic understanding of the technology side of it, we can now discuss the benefits that it has to auto insurance companies, and consumers.
- Claims-Filing a claim against your policy will be easier than ever for the consumer, and the agent. You will be able to enter the details online through your insurance carrier’s website. Documents, pictures, and other pertinent information can be uploaded onto your account. From there it will go straight to the agent. Blockchain helps the agent by giving them access to all the extra information that will be required to process the claim. Police records, access to street camera information, information about the lights in the area around an accident, medical expenses, just to name a few. The public ledger system allows them to access the information within a matter of minutes, rather than weeks.
- Efficiency-Nothing takes up more hours in the day of a car insurance agent then typing paperwork into the computer so it can be uploaded into your file. Thanks to the push from society about online platforms and speed insurance companies have relied more on their web platforms than they have on office visits. Smart contracts are a part of Blockchain that will drastically increase the efficiency of the entire process. The consumer will be able to fill out an application, pick a policy that works for them, make any tweaks that need done, and then pay for it all in one sitting. The smart contract system will analyze the data, taking what you entered and comparing it to everything else found in the public ledger, and will complete the policy. All this without you having to leave your house. As for the agent, they will be able to see the new contract and will have access to it whenever needed.
- Automation-As discussed above, Blockchain and the capabilities that it has will allow everything to be automated. From the moment that you sign into the website, to the last step when you make a payment, everything will be smooth as silk. In theory this should allow auto insurance premiums the ability to come down. Agents will have less to do with the process, leaving them more time to get more clients, which in turn will raise their profit margins. It is standard operating procedures for companies that want to maximize profits. They lower the premium prices to bring more people to them. The competition will do so as well, starting the price wars which are always entertaining to watch. The result is less cost to you, and more options if you need to switch carriers.
- Security-Security today is a huge concern for many consumers. The more online and automated a process becomes, the more uneasy some people get. Blockchain is secure to the point of being almost impenetrable. Since the information in the chain is shared with everyone on the network, a hacker would have to get into all the systems on the network at the same time and change the information in hundreds of computers. It is possible, but it is a task that most hackers will not even attempt, even if they could work together in tantum to accomplish such a feat.
Blockchain is an innovative technology that will change the way the automotive insurance industry will conduct business. The technology could not have come at a better time throughout the world. Consumers are demanding more platforms to conduct their business online. Blockchain offers this, and much more.