Blockchain-based insurance is set to transform claims administration, saving $10bn (£7.33bn) in costs globally by 2024, up from $1.1bn last year.
That is according to a new report from Juniper Research, which outlines how insurance providers will increasingly leverage the benefits of increased process transparency and real-time data sharing.
Insurance is a complex, data-siloed, and often inefficient area of business, according to the report, and blockchain offers critical advantages by enabling equitable data access and minimising fraud through increased data transparency.
The US is expected to see sharp rises in total cost savings through blockchain use for premium issuance and management between 2021 and 2024, with the market representing more than half of all cost savings globally by 2024.
And as a significant market for health insurance, the US will see the number of claims processed via blockchain climb from two million in 2021, to 24 million by 2024.
Juniper Research said that health insurance is a resource-intense area, and that the capacity for blockchain to replace inefficient processes and increase system interoperability will prove key to its success.
However, its report highlights how insurers have previously been reluctant to modernise existing processes, and that there are currently no global standards around blockchain networks.
Because of the clear benefits for insurance, barriers to implementation will begin to be overcome, enabling blockchain networks to proliferate, the report adds.
“Insurers must address barriers to implementing blockchain technology through investment and partnerships,” report author Susannah Hampton said.
“Any blockchain solutions deployed must integrate into existing underwriting and claims management platforms and offer an increased value proposition beyond what is already possible.”
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Author: Chris Seekings