Insurance Post, UK: Cognizant’s Senior Vice President of Global Insurance Strategy and Ventures Says Blockchain has a Number of Potential Applications and Exciting Implications for Insurers

“Although still in the early stages of adoption in some sectors, blockchain technology is beginning to emerge as a strategic force across multiple industries,” explains Michael Clifton. “The insurance industry is seeing plenty of action of its own. Some of the world’s largest insurers have taken notice of the potential of this technology.” Excerpts:

“Although blockchain could still be defined as ‘emerging,’ the technology has a number of potential applications and exciting implications for insurers.

The distributed ledger could help reduce the burden of reporting, balancing and payment reconciliation while claims paid timelines could see a reduction in physical damage claims from two-three weeks to a week.

Blockchain’s automated nature could result in numerous efficiency benefits, through the use of smart contracts, removing the cost of claims processing and minimizing fraud.

Despite the plethora of applications of blockchain for insurers, firms of all sizes have several challenges to overcome before it can be fully integrated into their business models.

While the reliance of blockchain ledgers on public key encryption or cryptography means they are safe from many traditional cyber-threats, it has the potential to cause significant upheaval resulting from the disintermediation and the transformation of how business is conducted in insurance firms.

In the current climate, it would seem that regulatory and security concerns – in addition to upfront costs - are still tipping the balance versus the potential efficiency and cost savings associated with the distributed ledger in the long term. After all, despite the benefits, blockchain is not a guarantor of authenticity.”

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