“With over $1.4 billion of investments that poured into blockchain globally in 2016 alone, the technology holds huge potential to transform insurance companies, and give them considerable competitive edge,” writes Arun Baid. “Joining large industry consortiums to keep abreast of latest developments will help insurers in this transformative process.” Excerpts:
“There is a growing enthusiasm and rising trust for blockchain technology today. The 2016 World Economic Forum’s report dubs blockchain, a potential ‘beating heart’ of the global financial system, predicting that it will account for 10% of global GDP by 2027. The essence of this overwhelming positivity on blockchain comes from its trustworthy, impenetrably secure peer-to-peer network, which fits numerous industries of the world, including financial institutions such as insurance.
Blockchain can be used across the insurance value chain because of its ability to offer long-term strategic benefits, such as lower operational costs in the form of reduced duplication of processes, reduced counterparty risks and increased automation through secure and decentralized transactions. The distributed ledgers of blockchain help streamline activities such as business processing, policy administration, customer payments, new investments management and the distribution of proceeds. Given these far-reaching advantages, blockchain can be used in several types of insurance, such as health insurance, travel insurance, crop insurance and other property and casualty insurance.
To succeed with blockchain, insurance companies have to pick, analyze and determine the right areas for this technology to add value by careful evaluation of their IT strategy.”
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