How blockchain is preventing insurance fraud

Blockchain, a cryptographically secured form of shared record keeping, is slowly taking the insurance sector by storm. While technology is permanently changing the landscapes in various sectors of the Kenyan industries, the insurance industry has a fair bit of catching up to do, especially with regards to Blockchain.

Despite the steady rise in the adaption of technology in Kenya, there will always be a varying degree of drawbacks. In the insurance sector, insurance fraud is a major problem. With millions of Kenya shillings being lost, or stolen monthly, it would only have been a matter of time until technological interfaces were entrusted to the protection of data. Mr. Peter Mwangi, research analyst at Association of Kenya Insurers, was at hand to say “Data is at the center of smart technologies providing solutions to the barriers of insurance penetration. Blockchain technology involves secure data sharing with peers enabling fraud detection and prevention and also boosting operational efficiencies across the insurance value chain enhancing customer satisfaction”

Recently, Blockchain was recommended as the way to go by the AI and ledger taskforce in Kenya. The report offered assessment of new and upcoming technologies, and their deployment in different parts of the world. It also recommended the government to utilize blockchain and AI technology to promote transparency. Mr. Peter Mwangi, research analyst at Association of Kenya Insurers was at hand to say “Data is at the center of smart technologies providing solutions to the barriers of insurance penetration. Blockchain technology involves secure data sharing with peers enabling fraud detection and prevention and also boosting operational efficiencies across the insurance value chain enhancing customer satisfaction.”

According to Dr. Bitange Ndemo, chairman of the task force, the report also recommends use of blockchain technology to strengthen democracy and elections in the country. With the InsureTech summit now on the horizon, the know- how of the application and implementation of blockchain in the insurance world will be revolutionary.

Revolutionary, in that blockchains ability to provide complete accountability, transparency and superior security will help insurers cut down on costs, save time and even improve on customer satisfaction. With such a fast paced industry, companies understand, that they must evolve to stay competitive. Which means streamlining processes and meeting the demands of digitally savvy customers. Blockchain technology can help insurance companies overcome today’s challenges and create transparent operations built on trust and stability.

This in turn, would eliminate or cut down on the particular topic of fraud. Through its use of public ledger, blockchain can potentially eliminate suspicious and duplicate transactions by logging each transaction. Through its decentralized digital repository, it can verify the authenticity of customers, policies and transactions by providing historical records. This makes it more difficult for hackers to corrupt and steal files. Making it even harder for a fraudster to think of exaggerating a claim and bringing situations out of context.

During the upcoming InsureTech forum, this and other vital issues will be highlighted. The issues that will be discussed play a massive part in the future of the Kenyan insurance scene and how, why and when technology can be utilised to impact the region for the greater good.