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5 Real-world Blockchain Use-cases in Insurance Industry

Nearly 80% of insurance executives have either already adopted or planning to pilot blockchain technology across their business units. The level of trust, transparency, and immutability that blockchain (distributed ledger technology) provides is impeccable. 

blockchain insurance use cases- benefits

Blockchain offers an independently verifiable dataset so that insurers, as well as customers, need not suffer from decisions based on inappropriate/incomplete information. In the instances of travel insurance, blockchain-based systems use external data sources to validate whether a flight was missed or canceled. Accordingly, insurers can decide on processing refund claims. Well, blockchain can handle even more complex situations of road accidents by accurately determining the vehicle or human fault.

The 5 practical blockchain use-cases in the insurance industry are-

  1. Fraud detection
  2. IoT & Blockchain together to structure data
  3. Multiple risk participation/Reinsurance
  4. On-demand insurance
  5. Microinsurance

Fraud Detection

In the US alone, every year fraudulent claims account for more than $40 billion, which is excluding health insurance. Despite digitization, the standard methods fail to recognize fraud. Blockchain can help in fraud detection and prevention to a great extent. 

Blockchain ensures that all the executed transactions are permanent and timestamped. I.e. no one, including insurers, can modify the data preventing any kind of breaches. This data can further help in defining patterns of fraudulent transactions, which insurers can use in their fraud prevention algorithms. 

Fraud detection using blockchain use case: Etherisc

Powered by smart contracts, Etherisc independently verifies claims by using multiple data sources. For example, for crop insurance claims, it compares satellite images, weather reports, and drone images with the image provided by the claimant. 

IoT & Blockchain together to structure data

As IoT will connect more and more devices, the amount of data generated from each of the devices will increase significantly. For instance, there were 26.66 billion active IoT devices in 2019 and nearly 127 IoT devices connect to the internet every second

This data is extremely valuable for insurers to develop accurate actuarial models and usage-based insurance models. Considering the auto insurance sector, the data collected about driving time, distances, acceleration, breaking patterns, and other behavioral statistics can identify high-risk drivers. 

But, the question is — how to manage the enormous data as millions of devices are communicating every second. 

And the answer is a blockchain!

It allows users (insurers) to manage large and complex networks on a peer-to-peer basis. Instead of building expensive data centers, blockchain offers a decentralized platform to store and process data. 

Multiple risk participation/Reinsurance

Reinsurance is insurance for insurers. It protects the insurers when large volumes of claims come in. 

Also read – 5 biggest insurance claims payouts in history

Because of information silos and lengthy processes, the current reinsurance system is highly inefficient. Blockchain can bring twofold advantages to reinsurers. One — unbreached records for accurate claims analysis and two — speeding-up the process through automated data/information sharing. PwC estimates that blockchain can help the reinsurance industry save up to $10 billion by improving operational efficiency.

For example, in 2017, B3i (a consortium for exploring blockchain in insurance) launched a smart contract management system for Property Cat XOL contracts. It is a type of reinsurance for catastrophe insurance.

On-demand insurance

On-demand insurance is a flexible insurance model, where policyholders can turn on and off their insurance policies in just a click. More the interactions with policy documents, the greater the hassle to manage the records. 

For instance, on-demand insurance requires underwriting, policy documents, buyers records, costing, risk, claims, and so on much more than traditional insurance policies.

But, thanks to blockchain technology, maintaining ledgers (records) has become simpler. On-demand insurance players can leverage blockchain for efficient record-keeping from the inception of the policy until its disposal. An interesting blockchain insurance use cases is that of Ryskex — a German InsurTech, founded in 2018. It provides blockchain-powered insurance platform to B2B insurers to transfer risks faster and more transparently. 

Microinsurance

Instead of an all-encompassing insurance policy, microinsurance offers security against specific perils for regular premium payments, which are far less than regular insurances. Microinsurance policies deliver profits only when distributed in huge volumes. However, because of low profit-margin and high distribution cost, despite immediate benefits, microinsurance policies don’t get the deserved traction. 

Blockchain can offer a parametric insurance platform. With this, insurers will need fewer local agents and “oracles” can replace adjusters on the ground. For example, Surity.ai uses blockchain to offer microinsurance to the Asian populace, especially those not having access to the services of banks or other financial organizations. 

For further queries around blockchain / insurance use cases, please feel free to drop us a word at hello@mantralabsglobal.com.

Related blockchain articles – 

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What will ‘Behavioural Changes’ Mean for India’s Digital Health Future

We are in the middle of a global pandemic, facing a threat unlike one never seen before. COVID-19 has been a reason for global concern since it has negatively impacted economies, shut down workplaces, and forced cities into lockdowns.

But history also tells us  that times of uncertainty also foster innovation. The pandemic has forced consumers and businesses to rethink how they behave both physically and digitally. As per McKinsey, COVID-19 has speeded up the adoption of digital technologies.

India, which was on the cusp of a ‘digital health’ revolution, has now been forced to embrace innovation and emerging trends. The healthcare sector holds great promise since new-age technologies like telemedicine, robotics, artificial intelligence (AI), genomics, etc. are transforming healthcare services.

There have been unprecedented changes in consumer behaviour as well. People are now increasingly relying on using the internet to find clinical information or engage with healthcare professionals digitally. Moreover, online consultations, telemedicine, and e-pharmacies have seen a rise in popularity.

Companies will thus need to capitalize on the changing patterns of consumption and health-seeking behaviour.

This article focuses on how changing patient behaviour will affect India’s digital health future.

A growing Indian healthcare market

According to a report by Future Health Index, India is a leader in the adoption of digital health technology. As per India Brand Equity Foundation (IBEF), the Indian healthcare market is expected to grow at a compound annual growth rate of 22% to reach a valuation of USD 372 billion by 2022. This growth can be attributed to the following –

  • Growing health awareness
  • Aging population
  • Lifestyle-related diseases
  • Rising income levels
  • Growth of internet availability

The rise of digital health start-ups is also playing a role in the growth of the healthcare sector. Indian health tech startup landscape has now matured.

Over the last few years, telemedicine has emerged as a fast-growing sector in India. Prominent start-ups like Practo, mfine, and Lybrate have established themselves in the telehealth market. McKinsey estimates that India could save up to USD10 billion by 2025 by using telemedicine instead of in-person doctor appointments.

COVID-induced behavioural changes

The COVID-19 pandemic has brought about changes to patient behaviour. The fear of leaving homes to get treatment has led to the growth of virtual care and telemedicine. 

As per a report by Accenture, almost 70% of the patients canceled or postponed their treatments due to the COVID-19 pandemic. Technology, therefore, played a crucial role in helping patients continue their care. Healthcare providers were even able to improve the experience for patients by delivering them faster response time, personalized interactions, and the convenience of getting consultation from home.

The same report by Accenture highlights some key behavioural changes that are being observed in patients – 

  • Nearly half of the patients now get their treatment at their homes instead of visiting a clinic.
  • Almost 60% of patients want to continue using technology for communicating with healthcare providers.
  • About 41% of patients now use video conferencing to connect with their healthcare providers. Of these, for almost 70% of patients, it’s their first-time using video conferencing for healthcare.
  • Almost 44% of patients used new apps or devices during the pandemic to manage their health conditions.

All this highlights the need for healthcare providers to reimagine their patient engagement strategies in keeping with the changing patient behavior.

Future of digital health in India

New digital technologies and tools are making an impact across the healthcare sector. They hold great promise in improving the efficiency of healthcare services while delivering better patient care. Below are some of the technological developments that are expected to revolutionize the way we seek healthcare.

Telemedicine

About 68% of India’s population lives in rural areas where healthcare services are not usually up to the mark. This barrier can be overcome by telemedicine that offers an excellent way for patients to consult a doctor in a much shorter duration. Telemedicine can cut waiting times and allow patients to avoid traveling to a clinic or hospital. Some other benefits of telemedicine include –

  • Immediate access to specialist healthcare providers.
  • Cost-effectiveness.
  • Improved quality of care.
  • Convenience to the patients.
  • Improved patient engagement.

Internet of medical things (IoMT)

The rapid growth of IoMT devices is rapidly changing healthcare delivery by playing an important role in tracking and preventing chronic illnesses.

It not only helps eliminate the need for in-person medical visits but also helps reduce costs. Goldman Sachs estimates IoMT to save USD 300 billion annually for the healthcare industry. IoMT will benefit those patients the most who are unable to get access to quality healthcare due to remote location.

Big data in healthcare

There has been dramatic growth in the amount of medical and health data in the last few years. These massive datasets can be used to draw insights and opportunities for healthcare organizations. Analysis of healthcare data can help discover warning signs and create preventive plans.

The widespread adoption of IoT devices also makes it easier to monitor heart rate, blood pressure, etc. This can help in the early detection of diseases like hypertension, asthma, heart problems, etc.

Electronic medical records

Electronic medical records or EMRs help collect, digitalize patients’ information, and store it in a single place. EMRs store various types of medical data like medical history, prescriptions, drug allergies, etc. and allow doctors to make accurate disease prognosis in a much shorter time. Some other benefits of EMRs include – 

  • Effective medical decisions.
  • Easy data recovery.
  • Improved collaboration.
  • Portability.
  • Security of medical data.

Artificial intelligence

Artificial intelligence (AI) has a big role to play in improving healthcare since growing digitization leads to the availability of a large amount of health data. AI has the potential to transform everyday health management in the following ways –

  • Improved accessibility of healthcare services (for example – the AI-based mobile app Ada is available across 140 countries and makes it possible for anyone to have access to medical guidance).
  • Improved efficiency.
  • Accurate disease diagnosis.
  • Improved insights to reveal early disease risks (for example – a popular app Verily can forecast noncontagious and hereditary genetic diseases).
  • Time and cost savings.

mHealth

Mobile health or mHealth refers to the monitoring and sharing of health data via mobile technology like health tracking apps or wearables. 

mHealth apps can prove to be beneficial in increasing patient engagement, providing health education, and offering remote consultations to patients. It can also use the data from wearable devices to improve the quality of care. Some other benefits of mHealth include – 

  • Faster access to physicians.
  • Improved medication adherence.
  • Remote patient monitoring.
  • Increased medication reconciliation accuracy.
  • Improved coordination between healthcare providers and patients.

Conclusion

It’s quite clear that COVID-19 has significantly impacted patient behaviour. There has been a growing preference for telehealth and mHealth apps. But all of this has also compelled healthcare organizations to put in more effort in adapting to these behavioural changes. Healthcare providers are opting to rely more on new technologies to continue delivering patient care. A more affordable standard of high-quality care is in the works for India’s digital health future.

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