In an interview with Helene Stanway of XL Catlin, Martin Cooper of RITTech confirms that Blockchain technology is the future of an efficient Insurance industry. Martin believes that the largest transformation following the application of the technology will enable underwriters to price risks in near real time. This will have an effect of allowing risk holders to pay premiums on time, and to fully understand the whole process of insurance risk coverage.
Helene Stanway is an expert on digital leadership where she is a part of the XL Catlin team that identifies, learns, and experiments on new technologies that XL Caitlin can apply in use specific cases such as Insurance. These cases include Blockchain, internet of things, augmented reality, and artificial intelligence technologies that businesses require to manage risks and boost customer experience.
Insurance Transactions Require Constant Data Registers
According to Helene, XL Caitlin believes that Blockchain technology is the ultimate solution to solving delays and backlogs of tasks that underwriters deal with on a daily basis on endorsing changes and new information.
These transactions involve the insurer, broker, and client. The client provides information on utmost good faith detailing the assets and risks on a proposal form under a certain product of cover. The broker picks the information and negotiates with various carriers the best deals that the client can have in the aspect of limits of liability, the scope of coverage, terms, and conditions, claim processes, and most importantly premium calculations. Afterward, an insurance company with the best term takes the risk in exchange for a premium and offers cover for a given period of time.
This process requires correct data that can be time-consuming and prone to errors in circumstances where the internal system is inefficient. Hence, Blockchain technology, being a system of ledgers, offers the best ecosystem of managing insurance data. The most outstanding implication is that it helps in near real-time insurance transactions processing.
Blockchain Technology Replaces Paper Works Through Digital Datapoints
Helen gives an example of the MAERSK shipping company where Blockchain-based insurance tests have shown that it takes less time to create data points for the coverage of an insurance risk. It becomes easier to register assets through an IoT sensor that is reliable and accurate. This helps in creating nodes that can be distributed among relevant users such as brokers, insurers, and even XL Caitlin insurance data managers. In this case, a Blockchain network becomes the primary source of data.
A digital-based system leads to the avoidance of paper-based transactions that are time-consuming, expensive to operate, unreliable, and even prone to manipulation for insurance fraud.
Smart Contract Is The Key To Execution Of Insurance Contracts
Smart contracts automate Blockchain networks to enable them to support decentralized transactions. For this regard, there could be protocols on smart contract features that asses various insurance risks and determine whether they meet a given set of thresholds. Further, smart contracts can also be used in calculation or premium in an open and transparent methodology.
Summarily, Helene disclosed that Blockchain poses minimum risks to the insurance industry while presenting an overwhelming number of benefits that can grow the important industry. Most importantly, there are incubating platforms that assist companies to create and deploy their customized Blockchain networks.