Taiwan Approves Blockchain System to Streamline Insurance Policies

Taiwan Approves Blockchain System to Streamline Insurance Policies

The financial regulator for Taiwan recently gave 11 insurance companies the green light to trial a blockchain network that simplifies insurance policy issuance and modification. According to Ledger Insight, this will provide insurance companies and insurance buyers with a new level of efficiency, and potentially cost-savings in the long-run, April 9, 2020.

Blockchain for Interlinked Insurance

Financial services are the single-most disrupted industry since the advent of blockchains started with Bitcoin in 2008. Adding to that stack, Taiwan’s insurance industry is primed to offer a new degree of convenience to users.

A person with multiple insurance policies across various insurers can trigger a claim on policies by submitting a claim for just one, given the other insurers are a part of this blockchain network. If a change is required, for details such as residing address or nominee, this can be done for various policies through a single application. But the benefits are not just for the customers. They are multi-fold for insurance companies as well.

For instance, if it is found that someone who had a long-standing life insurance policy bought a few more policies with other insurers days before passing away, this would enable insurers to actively pursue fraud that was otherwise difficult to catch onto.

Several insurance majors, such as Allianz, have also used blockchains to improve their back-end processes. By giving insurers the ability to work together to prevent fraud and streamline paperwork for claims, long-term cost savings is definitely on the cards.

Financial Fraud and Blockchain

The reason that the financial world is so caught up in “blockchain mania” is because of the technology’s ability to synergize industry-wide efforts. Before this, working together was a tedious task, requiring a significant amount of human capital and communication.

With blockchains, this can be done over a shared network that doubles up as a mutual database. Money laundering and other variants of financial fraud can be cut down on, decreasing losses for financial institutions that are otherwise unable to crack down on these activities.

Bitcoin introduced an immutable ledger with disinflationary money. The corporate world has chosen to focus on the underlying technology that powers the network rather than the ideology of digital money, though this is slowly changing.