Blockchain Accelerator for Insurance Claims Processing
Synechron’s Blockchain Accelerator for Insurance Claims Processing presents a scenario in which customers no longer submit a claim and insurers do not administer claims. The distributed database and smart contracts enable auto-execution of claims handling processes based on independent and trusted authoritative source data. Blockchain’s automation and objectivity will create an environment of trust for customers, insurers, asset providers and regulators. Operational costs including assessment, dispute resolution and payments will decline significantly, as will fraud losses. We believe blockchain, integrated with other emerging technology innovations, will reshape the insurance operating model in the next five years.
Insurer, Customer, Asset Provider and Regulator — Everyone Wins!
The Synechron Blockchain Accelerator for Insurance Claims Processing reinvents the claims handling operating model to enhance outcomes for all key stakeholders. An objective set of insurance policy criteria is coded into smart contracts, which take regular feeds from trusted authoritative sources to determine whether claims conditions have been satisfied. Payments are automatically processed via the blockchain wallet. Benefits include:
Environment of trust
- Customers benefit from greater certainty that claims will be assessed in a timely, transparent and objective manner. The blockchain takes the execution of assessments and payments out of human control where subjectivity, biases and commercial influences factor in the decision-making. The asset/service providers and insurers also benefit from the environment of trust.
Automation of claims validation, assessment and payment
- Insurance claims handling is expensive — consuming up to 20% of the premium revenue collected. Current processes rely on multiple manual steps to validate and assess claims. Smart contracts and authoritative data sources enable the automatic execution of assessment criteria, and the blockchain wallet executes payments without insurer intervention.
Objectivity and transparency reduces dispute resolution and fraud costs
- Dispute resolution and fraud costs are often inversely correlated — increase spend on investigating false claims and fraud costs will fall. Smart contracts define objective policy criteria executable against independent and trusted authoritative data sources, reducing the scope for debate.
- The insurance industry’s regulators, including the European Insurance and Occupational Pension Authority’s recent European directive, have consistently called for more transparent and efficient administrative procedures for processing claims.
Blockchain Technology Creates an Environment of Trust
Customers want to be able to trust that their insurer will pay out when they suffer an insured loss. The Synechron Blockchain Accelerator for Insurance Claims Processing delivers trust via the following blockchain technology features:
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