Pictured: Lloyds of London
Insurance providers are set to make savings of $10 billion in costs globally by 2024 by innovating with blockchain solutions.
This was among the findings of a new report by Juniper Research which has predicted that blockchain-based insurance will transform the claims administration process. Pioneers in blockchain-based claims already saved $1.1bn last year, it calculated, but can now look forward to increasing these early efficiencies by 800% through leveraging benefits such as increased process transparency and real-time data sharing.
The report, called Blockchain in Financial Services: Key Opportunities, Vendor Strategies & Market Forecasts 2021-2030, found that the insurance sector will see cost savings from blockchain use across all processes, particularly in insurance-heavy markets such as the US.
It said insurers can expect sharp rises in total cost savings through blockchain use for premium issuance and management between 2021 and 2024. Historically, insurance has been a complex, data-siloed, often inefficient market which blockchain can revolutionise by enabling equitable data access and minimising fraud through increased data transparency.
The report also identified challenges. Juniper pointed out that insurers have previously been reluctant to modernise existing processes, and warned that there are currently no global standards around blockchain networks.
“Insurers must address barriers to implementing blockchain technology through investment and partnerships,” said research author Susannah Hampton. “Any blockchain solutions deployed must integrate into existing underwriting and claims management platforms and offer an increased value proposition beyond what is already possible.”