In this article we will outline how blockchain technology improves the process of claims management for all parties involved.
Through blockchain it is possible to maintain one unified system to which all parties can connect to. This provides many advantages compared to the conventional way of processing claims.
In the past every participant maintained their own data and view of a claim. That means data and documents had to be sent around. Insurance companies requested data from the leasing company or the police, for example. Then they had to wait until the responsible person returned the desired information. This clearly lengthens the overall processing time for each claim and produces unnecessary work.
From our point of view, blockchain is the key driver of consolidating individual software solutions used by participants. By connecting and working on the blockchain access to information is possible within seconds, not days. It allows a much higher speed of execution and significant reduction of manual work.
So now you may think that a consolidated system used by all participants would be possible without blockchain as well.
You are right.
But here comes the big difference.
In the enterprise software world there is nothing more important than privacy and trust.
What does that mean for claims management?
Basically it means that all parties can trust the information stored or provided by the blockchain.
Further there are fine-grained access control mechanisms that ensure a specific party has access to information that is relevant to them only.
To sum it up, the blockchain acts a shared and distributed database including highly sophisticated privacy rules.
It stores all records and actions regarding a specific claim in a secure way.
Thus we achieve more transparency and easier access to information.
So far we understand that sharing data through blockchain is the first big enhancement for claim processors. The second argument can be even more powerful. Blockchain can run business processes across organizations and companies. By this we mean the logic and the rules that are behind a process. In the current world every party runs its own processes without being connected to other parties. By utilizing blockchain we have a solution to connect them securely. This again shortens the time to completion.
Sophisticated ACL (Access Control) ensures that participants have access to data they are entitled to. Blockchain uses a Public-Key-Infrastructure (PKI) to sign and validate requests and identities at every stage of a transaction.
Trust is delivered by the underlying technology that blockchain is based on. Every action (transaction) is stored forever and cannot be tampered. In contrast to the popular bitcoin blockchain (public) we talk about about a permissioned blockchain, that does not allow anonymous participants. In the enterprise world we need a blockchain that knows all actors and validates their identities.
First of all there is one big benefit to all of them.
It is the speed of execution.
Nobody has an interest to unnecessarily extend the processing time of a claim.
If participants have the right data at hand from a source that they can trust it will ultimately result in higher efficiency.
And obviously there will be no new investment without monetary benefits. As we already have implied to see significant efficiency gains, we will therefore achieve reduced manual work. This means we will need less people to do the same thing. Traditionally claims processing heavily includes manual work and this gives plenty of room for cutting costs here.
It may take some time until organizations adopt and implement blockchain technology, but our research has shown us that there are real benefits and arguments to move forward. Especially for claims management as it involves multiple parties and untrusted relationships between them it is the perfect candidate to use blockchain technology.
At Fleets International Enterprises (FIE) we manage company car fleets of all sizes in different industries across multiple countries. Constant evaluation and improvement in data management has been key to an increased efficiency. Our experience has shown that investments in cutting edge technology pay off, as they enhance processes and drive automation. Further it provides insights to explore savings potential together with the clients.
Talk to us, if you want to know more about integrating blockchain technology into claims management or similar use cases.
Read more articles about fleet management with its constant challenges and visit the FIE blog.