What does blockchain mean for brokers?

Blockchain technologies can support the significant digital transformation underway in the Insurance industry. We spoke to Gallagher Bassett’s General Manager of Information and Technology Services, Julian Martin to get a better understanding on what blockchain means for brokers.

Martin explains, “Blockchain has potential applications across the insurance and claims management industries as it is a decentralised ledger where authorised assets and their associated policies could be registered making for easier and more efficient claims processing”.

It could replace existing information systems, leading to streamlined paperwork and reconciliations for insurance contracts, accelerated information sharing, faster claim payments and reduction in average claim cost related to claims administration and damage from fraud and fraud detection.

Martin says that the technology can be used by insurance brokers in myriad ways, “It creates an opportunity for tech savvy brokers to get on board early and develop new products with smart contracts that take advantage of blockchain functionality. With the right products, they will be delivering better value for the customer, reduction of fraud, and increased speed.  By having these products they will be able to improve their profits by increased volumes and lower cost of processing”.

Blockchain has the potential to enable new businesses as well as help potential improvements in core business processes within industry and regulatory regimes despite significant challenges (privacy laws, regulatory approval/requirements, etc.) that need to be overcome before the technologies can be widely used in the insurance sector.

At the moment, Blockchain is largely being investigated for use in the banking area however there are a number of case studies being undertaken by a group of insurers in Europe.