Based on the results of the research report entitled “A Review of the Types of Blockchain and their Applications in the Insurance Industry” released by IRC, blockchain as a technology has just recently been adopted in the insurance industry of some developed countries. Likewise in Iran, some of the companies have intended to make use of this technology in the insurance field, according to PRIAO, IRC.
Blockchain with opening up the possibility of reducing frauds, automatizing loss settlement procedures, making records and documents more accessible, reducing the administrative costs, and smoothing underwriting processes will bring more efficiency to the insurance industry.
Different types of blockchain include open blockchain (public-permissioned and public-un-permissioned) and closed blockchain (private and consortium) that their strengths lie in their technological dimensions and their weakness are related to scalability, energy consumption, and performance.
According to this report, blockchain with the use of smart contracts in the underwriting processes, claim management, and fraud prevention will build up more trust, remove intermediaries, provide faster loss settlement, and facilitate tedious procedures in the insurance operations. For conventional and top selling lines such as auto insurance, health insurance and life insurance, blockchain guarantees more automation and procedure facilitation. In other lines of business such as parametric insurance, reinsurance, and peer-to-peer insurance, more overall efficiency is achieved with the blockchain.
The Persian full text of the research report is available at this link.