Blockchain in Health and Life Insurance: A Breakthrough Opportunity
The health and life insurance industries are facing numerous challenges, including rising costs, increasingly discerning customers, and disruptive innovation. Blockchain technology, originally developed for cryptocurrencies, has the potential to address these issues and transform the insurance landscape.
The Promise of Blockchain in Insurance
Health and life insurers are actively exploring how blockchain can be adapted to improve record-keeping, transaction execution, and stakeholder interactions. A recent crowdsourcing research project by Deloitte’s Center for Health Solutions and Center for Financial Services investigated potential blockchain applications in the insurance sector.
The research identified six promising use cases for health and life insurers:
- Creating Interoperable Health Records: Blockchain can facilitate the development of comprehensive, secure, and interoperable health information repositories. This could solve the current interoperability problem more effectively than existing technologies.
- Smart Contracts for Administrative Efficiency: Blockchain-based smart contracts can automate data collection, link information, and execute actions, improving operational efficiency and reducing costs.
- Enhanced Fraud Detection: Smart contracts can help verify the validity of claims and applications, reducing fraudulent activities in the insurance industry.
- Improving Provider Directory Accuracy: Blockchain’s decentralized consensus protocols can enable providers and insurers to update listings more quickly and easily.
- Simplifying the Application Process: By providing secure access to comprehensive medical records, blockchain can make the application process more client-centric and less intrusive.
- Facilitating Dynamic Insurer/Client Relationships: Electronic health records stored on blockchain can enable the integration of various wellness-related behaviors into the insurer-client dynamic.
Moving Towards Interoperable Health Records
Blockchain’s added security and trust-building capabilities make it an attractive solution for creating interoperable health records. Such a system would likely draw directly from existing Electronic Health Records (EHRs) in hospitals and physician offices.
What Should Insurers Be Doing About Blockchain?
Insurers face growing pressure to reduce administrative costs, where blockchain can make a significant impact. The technology can modernize fragmented legacy IT systems, improve efficiency, and enhance competitiveness. To leverage blockchain effectively, insurers should:
- Identify and invest in potential technology partners on the cutting edge of blockchain development.
- Engage with outside experts in blockchain development.
- Collaborate with broader healthcare consortiums to develop standards for blockchain-enabled interoperable data repositories.
- Strategize, experiment, and develop proofs of concept to create next-generation products and services.
By embracing blockchain technology and its potential applications, health and life insurers can decrease costs, improve operational effectiveness, and strengthen relationships with policyholders. The key is to be bold and proactive in harnessing blockchain’s unique attributes to create innovative services and stay ahead in a competitive market.
