THE BLOCKCHAIN COMPASS: Welcome to the World of Blockchain by Akcay Tolga

Author:Akcay, Tolga [Akcay, Tolga]
Language: eng
Format: epub
Published: 2021-08-01T16:00:00+00:00

Challenges Currently Facing the Insurance Industry

Most of us are very familiar with having insurance for our lives, medical bills and vehicles. In fact, the insurance sector which is a multi-trillion-dollar industry currently covers various aspects of our lives. For instance, Bruce Springsteen spent $6 million to insure his voice and we now have all kinds of insurance cover – our pets are insurable, there is also traveler's insurance which covers all costs associated with kidnapping and several others. This might paint a picture of an industry that is well-established and valuable and this is correct to some extent.

But the truth is that the insurance industry is facing several challenges. Top on the list of challenges facing the industry are issues of human error, inefficiency, fraud and perhaps the greatest problem facing the industry is cyberattacks. There are several reports of data breaches caused by cyberattacks and Anthem Insurance was not left out as the company disclosed there was a data breach that resulted in the exposure of sensitive data and 78.8 million customers were affected in that incident. Apart from the inestimable losses as a result of identity fraud, it affected the entire industry.

The Present State of Reinsurance

In case you do not know what reinsurers do, they insure the insurers, however, this is often done in an arcane and highly inefficient system which is determined by manual processes and one-off contracts. Based on the specific kind of reinsurance a company purchases, it may cover some aspects of the insurer's risk within a specific period and in some cases, it may just cover certain risks like natural disasters. Unfortunately, the existing reinsurance process is not only complex but highly inefficient.

With facultative reinsurance, every single risk contained in a contract has to be underwritten. Now consider the fact that contracts often require about three months of wrangling between all the parties involved before they are eventually signed. This is what I mean when I said the process is notoriously inefficient. Generally, insurers usually hire the services of more than one reinsurer and this also implies that they exchange data while processing claims. There is always the issue of parties having different data standards and this results in different interpretations of ways to implement a contract.

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.