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Establishing Communities of Trust in a Connected World: A Sample Use Case

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Reimagining Accident management and the business of insurance with blockchain technology

​In our previous blog post, we discussed the need to have trusted communication between entities in a connected ecosystem. We also discussed how managing the knowledge graph ontology across ecosystems results in significant rewards. In this blog post, we will try to explain this concept in more detail with the help of a use case.


Use Case: Accident management using Blockchain technology


Being involved in an accident is definitely not the highlight of anyone’s day. Consumers buy insurance — auto, health, life — because they want to be sure that they will survive financially when the unexpected happens. But, going through the claims process for accidental/life insurance is tedious, annoying and tiring. Current claims processing relies heavily on antiquated systems, endless phone calls, and sending information back and forth electronically. Insurance fraud also remains a serious source of concern.


As insurance companies explore diverse solutions to these challenges, blockchain has emerged as a way to bring about transparency and transformation in areas such as client onboarding, underwriting, and claims processing. A blockchain, by definition, allows untrusted parties to reach consensus on a shared digital history, without a middleman. By pulling data once from the vehicle it supports the needs of multiple stakeholders through trusted orchestration with third parties. By implementing blockchain, most of the necessary information that is required for claims verification can be processed easily and quickly. Since blockchain can take inputs from a variety of different sources without tampering any information, insurers can use the data available in the blockchain to track the usage of an asset. Provenance is one of the major areas where insurers can take advantage of blockchain networks. 


Accident management and the business of insurance with blockchain


Client onboarding


For KYC (Know Your Customer) compliance, insurance companies usually collect and verify all the key details of their customers such as name, communication address, date of birth, occupation details, health conditions and economic status. The due diligence process sometimes takes a lot of time as the data needs to be reviewed by multiple departments and various third parties. Also, during data reconciliation, companies devote additional resources to correct any errors that would have occurred during data collection. 


A blockchain network solves these issues and reduces the time to onboard a client. The network is distributed, so the organizations with the right permissions can access the necessary details/documentation. Since the records are cryptographically secured and linked together, they cannot be altered retroactively. These features facilitate the secure sharing of information across an organization and to appropriate third parties. Also, since the customer identities are already secured with blockchain, insurers can efficiently verify their eligibility without coordinating/consulting with multiple sources.




The underwriting process in insurance involves evaluating the risk of furnishing a client with a policy with certain coverage and the premium to be collected for it. Underwriting involves a significant amount of data analysis so that the insurance company does not incur losses after rolling out new policies. For policies offered to large businesses/corporations, the risk evaluation process might be extensive. 


Blockchains also bring transparency and improve trust in the underwriting process by enabling shared visibility in complex multinational programs. According to Boston Consulting Company analysis, ecosystem blockchains can give insurers external data that can be used to devise better pricing strategies and reduce their exposure to fraud. Currently, risk assessment is predominantly based on an insurer’s internal data and on the customer’s history. It also estimates that blockchains could help the worldwide property and casualty insurance industry reduce its combined operating ratio – a widespread measure of commercial success in insurance – by five to thirteen percentage points and generate upwards of $200 billion more in technical margin from its current gross written premiums.


Claims processing


For a policyholder, processing a claim can at times be a confusing and tiresome process. Also, for insurers and reinsurers, identifying the right documentation to process the claim can be time-consuming too.  A distributed blockchain network makes it easier and fast for all insurers to access the same information. This drastically reduces the administrative overhead associated with each claim. Also, solutions such as Nexledger from Samsung SDS enables provenance (knowing where something came from) so that counterfeit items can be easily identified. With less probability of fraud, claims can be handled quickly. 




Transforming the insurance industry and related workflows


Blockchain is equipped with the capacity to eliminate the inefficiencies due to the use of outdated systems in various industries. It makes it easier to share information, provide a transparent and greater line-of-sight to data and security through records that cannot be altered once they are written. This is key to the insurance industry and the labor-intensive, error-prone and repetitive tasks such as client onboarding, underwriting and claims settlement. Through the use of a unified platform to store and share all the documentation, these tasks/processes become more efficient. 


I am sure everyone would love to spend more time moving forward with their lives after an accident as opposed to reliving the traumatic experience over and over again in processing their claim. There are more important things that need to be taken care of after an accident and blockchain could make life easier in difficult situations like these. The image below summarizes the various benefits that the auto and insurance ecosystem players can derive by applying blockchain technology to insurance processes.




For more information, check out the presentation by our Automotive Cloud services expert, Steve Surhigh on Establishing Communities of Trust in a Connected World.


Also, let us know your opinion on the future outlook for trust in a connected world especially in connected cars. We would love to hear from you!