Claims Technology of the Future
Remember Blockchain? It was the mantra being recited over and over again by excited insurance devotees only a few short years ago and it was going to take the industry to a Nirvana of technology inspired transformation. Hardly anyone knew what a Blockchain was or could do but many of us were devotees until the Blockchain craze finally burnt itself out around about 2018.
Maybe Blockchain’s time has finally come, however, as insurers begin to realise the future potential benefits of distributed ledger technology, which ranges from streamlining claims to enabling better transparency in contracts.
Full synchronisation of data and contracts among multiple parties is gaining real traction in the insurance community according to Antonio Di Marzo, head of products at B3i, a global insurance industry consortium, in a recent insurance finance report, who says:
“All the parties in a contract can benefit from full synchronism and reconciliation at the source, removing the need for manual transactions. In reinsurance there is a huge opportunity to automate all the post-placement processes where large volumes of technical and financial accounting are exchanged and currently, manually reconciled to settle a transaction.”
Ultimately, market-wide inefficiencies can be reduced while still maintaining processing standards. “Traditional business processes require each party to autonomously ingest the data into their systems, carry out the processing, data analysis and then take a decision to transact. All these activities happen in isolation, requiring a significant amount of effort, potentially leading to errors,” he says.
The advantage of using Blockchain in insurance is that it builds trust between participants and links them in the same ledger. “This is especially relevant where information has to be put in manually. Blockchain eliminates this and avoids mistakes from operating manually. The main drivers for considering a blockchain solution are security, streamlining processes and eliminating repetitive manual actions,” says Robert Nijhout executive director of the International Credit Insurance & Surety Association (ICISA).
The pandemic has accelerated some trends – Blockchain included. Gen Xers and Baby Boomers currently hold the purse strings when it comes to investing in new forms of London market technology. They are no luddites when it comes to making business-based technology transformation decisions but experience has taught them to be wary of the next big thing in technology. Sometimes it is better to miss a wave, pause, take a deep breath and catch the next, better wave.
In our next blog on the future of claims, we will be looking at the future of smart contracts, digitisation and reinsurance.