Block chain based solution for crowd funding insurance model enable a P2P insurance network . in this business model, insures would focus on supply demand matching, to risk calculation, operation and shift away from asset management. the insure would provide a platform where customer can post their insurance demand, which could be either a standardized product or even a specific demand.
The insure then would user risk-analysis based on historical data, to perform a premium calculation to post the expected return, after subtracting margin. posting this premium calculation, interested investors can bid or subscribe to the demanded insurance .payment from the investor to the customer is guaranteed with smart contracts in the case of which the event customer posted for their insurance demand happens.
Administration and execution process are simpler
Fully automated, transparent and cheaper than a traditional setup.
Today, when customer wishes to make an insurance claim, they need to go through a process wherein an auditor from the insurance company visits and then decides show much they will be compensated. The underwriting process in the insurance sector is usually quite tedious and time consuming with document submissions, verifications, risk assessments etc, the process usually goes through third parties. The insurance claim documents are sent to the insurance company who them compensates for the damage . the process is extremely lengthy and exhausting as the insurance companies need to spend a lot of resources in validating the claim.
Integrating smart contracts in the insurance market, the entire process of claim settlement can be made faster, transparent and much more efficient. Smart contracts are simply computer programs which run on the block chain database and can be programmed to self-execute when the condition written in their sources code are met. Smart contracts can create an elevated level of trust between an insurance company and its customers.
Smart contracts-enabled process through with the insure can get the relevant customer information through third party systems like the DVM for automobile insurance .the insure can then review the police and set a premium amount. One the details are finalized, this is incorporated into a smart contract. It also has the ability to execute police terms when a claim has to be processed . follow that, a brief report will be shared with claims administrator for final settlement.
Reduce the overall turnaround time for the claims settlements process
An insurance policy requires the Applicant to meet certain initial conditions to get approved as a policyholder . insure rely on evaluators , auditor and claim adjusters who process multiple documents to verify statements made by applicants and claimants.
Smart contracts based P2P insurance solution can automate the underwriting of policies, the validation of claims, and the verification of the state of places, people and things in the real world .true peer insurance implies that new policies are underwriting and new claims are evaluated by current policyholders rather than full-time employees of the Distributed Autonomous Organization.
The growth of the internet of thing (loT) has created opportunity for insures to create products on a us age-based insurance (UIB) models. Essentially, the insure would be able to customized the products based on individual behavior and needs. For instance, for automobile insurance, data can be gathered about the individual’s driving style, braking patterns, speed etc to decide on premium that are just right for that person.
While this is beneficial, it raise a lost of challenges. Primarily, regarding the volume of data that would be coming in and the number of devices communicating with each other. Block chain would be able to manage complex networks like that by getting the devices to manage themselves. This saves a lot of money also as it negates the need to set up data centers to process the information.
Claims prevention is about risk management. It involves anticipating potential claim situations and deciding on actions to avoid them. Introducing new data streams can improve this process by considering location, external risk, and analytics. Block chain can provide a distributed ledge which allows the insures and other parties a shared platform that can be updated with relevant review repots.
Another block chain application would be connecting and gathering relevant data from multiple devices and applications which allow for seamless communication between all parties. for instance, sensors could be set to trigger alters to the insurers in the event of crash or other event to initiate a claim and then inform pre-approved third parties to take action. This is especially useful in case of natural disasters in remote areas.relevant data can be collected from seismic station or similar network to determine the claim amounts.
Block chain is getting popular each day and more people are getting hands on with cryptocurrencies like bitocoin, Ethereum etc. An easy to integrate ,easy to use cryptocurrency wallet would enable retailers to accept cryptocurrencies from their customers to do more sales.
A crypto currency wallet is a secure digital wallet used to store ,send and receive digital currency like bitcoin.there are several types of wallet that provide different ways to store and access digital currency .