Page 21 - Insurance Times December 2021

Transaction authentication processing, a record of all the databases that must contain
The nodes in the network, which can either be a computer all the information about the claimant like his medical history
system or a user, will receive the message from the network and procedures and all other required information in one
and authenticate its validity. place would make the claims process efficient.

Routine Interactions (Streamlined)
Block creation
Insurers envision is to create a world where to access
The transactions that are yet to be completed are put
together in the block, which is an updated version of the information of an insured can be possible in seconds i.e., to
ledger by one of the nodes in the network. store them on a database with a unique identity number.
They aim to create prompt and more reliable systems so that
routine insurance interaction can become more trustless and
Block Validation
pain-free to lessen the countless frauds that happen daily as
The validator nodes of that network receive the block on well as headaches.
which they work to validate through a repetitive process.
Risk Prevention
Block chaining Insurers have the duty of employing the most inflexible risk
When all the transactions are authenticated, the new block prevention and fraud detection tools and the Blockchain is at
is then attached to the existing Blockchain. the frontier of cutting-edge fraud prevention in insurance.
The advanced technology can be utilized as a way to make
Blockchain Evolution of Models over time the experience seamless and secure by sharing fraud
intelligence among decentralized institutions, and may also
Initially, Blockchain started with Blockchain model 1.0, which
minimize counterfeiting, double booking, and document or
focused on the currency. Cryptocurrency's deployment in cash-
contract modifications by instituting clear, timeless records
related applications such as digital payment systems,
of asset ownership. E.g.: IBM is using Blockchain for their
remittances, etc. was introduced under this model.
insurance platform to increase transparency.
When Blockchain model 2.0 came into being, only then was
it adapted by Insurance Industry. This model focused on smart Insurance On Demand
contracts. It was realized that economic markets and financial With the employment of smart contracts in insurance, policies
applications are more than simple cash transactions. are activated and terminated based on predetermined
criteria. Through this, there is the quicker establishment of
Blockchain 3.0 has brought significant changes in its model. policies based upon a database of required information for
Its application has gone beyond finance and market and is on-demand creation of policy and hassle-free claims
workable in the areas of government policies, health, literacy, processing.
science, etc.
Property and Casualty Insurance
1.2 Application areas in Insurance It covers risks related to losses or damage caused to property.
Collecting data on assets was quite time-consuming and
Fraud Prevention caused many inefficiencies too.
All insurers are committing sufficient time and resources to
fight fraud. Around 95% of insurers employ anti-fraud With the coming of Blockchain, tracking the whole lifecycle
technology and out of which 71% say that detecting fraud is of the asset has become possible. With the help of smart
the foremost aim of such technology. Insurance frauds are contracts, physical or paper contracts could be digitized. An
made likely by the lack of shared data across the insurance algorithm could be set for the process of claims following
industry. which liabilities could be calculated based upon the
standardized criteria. Additionally, the records can be
Claims Processing updated in real-time by insurers and policyholders as and
Apart from fraud detection, an industry-wide information when the status changed.
database could serve several purposes in the insurance and
as a resource through which claims can be processed, paid Go2 Solutiona a firm in claim investigations is trying to simplify
out, or denied with more speed. For policy creation and claims auto insurance using Blockchain. Allianz Insurance has

The Insurance Times, December 2021 21