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DLT and Smart Contracts: Dual Technologies Revolutionizing the Insurance Sector

By CIOReview | Friday, June 7, 2019

FREMONT, CA: Blockchain technology has been impacting almost every business sector, offering end customers, a whole fresh image. The insurance technology update has progressed along with modifications in client lifestyles and service delivery. To add on smart contracts, sensor-based automated claims management, etc. are tremendously impressing both, the policy-holders and the insurers. Blockchain powers the insurance processes by bettering the policy and critical data management. This technology emerges as a potential resource, allowing the insurers to add value to bring efficiencies and cost savings to current business procedures.

A logical place to start for insurance companies seeking to leverage blockchain advantages is the efficiencies that the technology could bring to the often time-consuming and expensive methodologies connected with data And claims management. Insurers streamline internal procedures, and several intrinsic characteristics of blockchain may help serve the purpose better.

A smart contract is a software that inspects specified network transactions and executes certain activities automatically, subject to the fulfillment of certain defined circumstances. The smart contract enables clients to obtain a payout after a delay exceeding a certain length of a moment as quickly as they arrive at their destination. Also, as smart contracts and blockchain technology decrease administrative expenses and the processing of claims, insurers can start providing earlier financially unviable products such as microinsurance. Under current insurance legislation, the self-executing nature of intelligent agreements could face different regulatory obstacles. State legislation prescribing claims processing processes could be involved if insured claims that a claim rejection was unsuitable or if the smart contract contains a bug that causes the contract to fail to perform as designed.

The dynamic and fulfilling use cases offered by the blockchain technology and smart contracts prove to be an asset in the insurance industry. Emerging as a problem solver this technological double has a lot more to provide the insurers in the coming days.

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