The benefits of Ethereum include facilitating decentralized trust, increased speed, and reduced costs. While new technologies have the potential to provide extreme value to the insurance industry, they often also carry significant risks. A website like Ethereum Code is a wholly automated cryptocurrency platform offering the best features like liquidity, trading tools, and customer support.
These benefits are shifting how the insurance industry thinks about business in a globally connected society. In short, Ethereum is revolutionizing how businesses conduct themselves in times when we cannot predict what’s next. Guidelines for Understanding Ethereum
How can an insurance industry leader quantify the potential cost savings and potential speed of doing business that Ethereum offers?
Traditionally, insurers have been heavily involved in developing new technology, yet insurance companies often find themselves in innovators’ labs even after spending millions of dollars on R&D and development. However, this reality is changing as the insurance industry sees the value of incorporating new technology and thinking about how disruptive technology could change their business.
In the blockchain, engagement in an insurance contract is often very straightforward. For example, when a person buys a house in the United States, that person pays for property insurance. After making the purchase and receiving payment, the insurer will send out an inspection team to verify if there are any issues with the property.
The insurer then sends out another team to inspect its surrounding areas to determine if they’re likely to flood or incur other potentially catastrophic damages. After the first inspection, the insurer reaches out to the individual to decide on a course of action if an issue is found. For example, the homeowner may be required to make some repairs or pay for a new inspection.
The insurer’s team will also review its policies and ensure that it contains all necessary coverage clauses that the situation may require. Finally, if there are no issues with either party’s submissions, the policy will be sent by the user to the individual’s home address for signature. Building this policy alone can take weeks of back-and-forth between both parties. However, Ethereum can significantly reduce the time it takes to make the policy.
The World’s Largest Insurance Market — China
Blockchain technology is also making its way into the world’s largest insurance marketplace. Many international corporations and startups have started to build insurance applications on Ethereum’s blockchain network. Policyholders can also use these newly minted digital certificates as digital identities tied directly to the individual’s Ethereum wallet. It can help to simplify the process of verifying the individual and obtaining policies.
Additionally, Ethereum’s blockchain technology enables insurance companies to offer support for smart contracts. For example, in many countries, automobile policies require specific procedures for disabling the brakes on a vehicle during an accident. Ethereum’s smart contract would define those required procedures and automatically enforce them with or without human intervention.
Insurance companies are actively searching for ways to use Ethereum’s blockchain technology to reduce operating costs and speed up the process of creating new policies. So now, let’s discuss the benefits of Ethereum in the insurance industry.
- Property & casualty (P&C) insurance:
P&C is the largest insurance segment worldwide, accounting for roughly 30 per cent of the insurance industry’s revenue. Comparing Ethereum and traditional solutions is difficult, but it’s safe to say that Ethereum (ETH) is currently more efficient. In addition, intelligent contracts can integrate automated actions within the contract giving companies a competitive advantage over their competitors that do not have such capabilities.
Visa and MasterCard are both notoriously expensive payment processors for large companies. However, since companies are integrated into the Ethereum network, they can process their transactions in seconds. In contrast, banks can take weeks to process a payment. What’s more, Visa and MasterCard do not offer the high level of security provided by Ethereum’s blockchain or its associated technology.
- Over-the-counter (OTC) insurance:
Regarding business, OTC insurance is similar to P&C insurance, except that instant settlement is usually not required for OTC policies. Therefore, these policies are often cheaper and faster than P&C policies due to the minimal settlement time involved in the transaction.
Life insurance is smaller than the above two, so making a direct comparison will take a lot of work. However, Ethereum’s blockchain can still be used by people for life insurance for transaction authentication purposes and for issuing policies to the beneficiaries of policyholders.
Major insurance companies can use Ethereum’s blockchain technology to verify healthcare providers’ identities using their digital certificates and as an alternative communication channel with them in case of any problems that may arise while providing healthcare services.
- Automating insurance claims:
Insurance claims can often prove complicated with a high error rate, delays, and inefficiencies. So it is because all of the procedures involved in receiving and executing policies must co-occur. Ethereum’s blockchain technology can significantly improve the speed at which insurance claims are dealt with.