Fifteen Indian insurers have jointly begun the country's first blockchain project in the financial services industry to share medical records and to enable fast approval or denial decisions.
This means lower costs for insurers, as one medical examination would be now enough for all insurance providers involved in the project. Currently, each insurer in India commissions separate medical tests for potential customers.
Using blockchain technology, basically, the medical records of insurers would be saved and accessed, which will allow swift data sharing without compromising on security aspects.
The insurers involved include ICICI Prudential Life, HDFC Life and SBI Life Insurance. They have tied up with IBM and Cateina Technologies to create a blockchain-based solution. The concept is based on distributed ledger technology, and helps participants to work on common areas of interest. It is expected to help in improving business by providing customer KYC, claims history, medical records, and agent track records while flagging fraudulent transactions.
Mr Subrat Mohanty, senior executive vice president, head-strategy, at HDFC Life, said that blockchain would reduce these inefficiencies and provide a record of information that can be accessed in a secure manner.
Although the blockchain technology is still in its nascent stages of commercial deployment, insurers say there is a need to form policies and procedures to ensure that personally identifiable information and health information are always protected.
"This platform will give insurance companies the option of cutting down on operational costs on getting information that is core to the underwriting process in a trusted manner by keeping in line with the privacy regulations. On scaling up, if we can create social scorecards of medical providers, then one can actually rate them for future customer reference," said Jitan Chandnani, Blockchain Leader at IBM.
An incentive-based data retrieval process would be set up, wherein the provider which provides the data using the blockchain platform would be provided an incentive for sharing its data. Through the system, fraud and fake medical records would be sorted out and filtered, so that insurance firms can detect scams easily.