How Blockchain Is Transforming Insurance & Shipping Industries
Blockchain is revolutionizing across major industries in the world. Implementing Blockchain has driven plenty of scopes in industries such as Banking, Logistics, Insurance, and healthcare.
Today, I want to share with you our experience in a Use case, built with Hyperledger Fabric and Hyperledger Composer. This blog explains the use case built for the shipping and insurance industry to track shipping and compute claims through smart contracts.
Before we start, you need the understand Why blockchain is a great option to transform the insurance and shipping industry.
Why Blockchain for Insurance?
Insurance Fraud is one of the major problems dealt with by insurance companies. According to a business report, it is estimated that insurance companies incur a loss of $30 billion annually for processing false claims. Insurance companies find it difficult to analyze the real parameters that trigger the accident.
The immutable feature in blockchain can be leveraged to handle the claims data. So, fudging over claims data can be avoided. Another robust capability of blockchain is the smart contract. This smart contract can be used to trigger the claims automatically.
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Overview of Use case
The use case which we built is for processing insurance claims for a shipping company. The company ships tons of perishable products to different countries. These products are shipped through cold storage containers at certain temperatures.
Interestingly, the shipping company fits temperature monitoring sensors that record minimum and maximum temperatures. The sensor then transmits the recorded temperature for every minute. The shipping company then submits claims for the loss incurred in shipping due to unexpected temperature fluctuations. The insurance company then assesses the claim and approves the amount which is finally transferred to the shipping company.
How Blockchain was implemented
Our team has analyzed the above use case and opted for Private permission blockchain for implementation. With Hyperledger Fabric and Composer, a private network is built. Once a shipment contract is created between the shipping company and insurance company, the smart contract gets triggered in the Blockchain. This smart contract contains the minimum and the maximum temperature threshold limit applies to the entire shipping process and the insurance premium amount.
The containers are fitted with a temperature sensor and once the shipment is docked, the sensors start sending the temperature every minute. The application compares the sensor data with the threshold limit and any violation in it is recorded in the blockchain. Once the shipment is delivered, the smart contract computes the insurance claims amount and records it in Blockchain.
Both the insurance company and shipping company are the participants in the blockchain network. Hence the claim amount can be viewable by both the parties. Once the amount of the claim is approved by the insurance company, it will be credited to the shipping company.
The use case which we built has benefitted both the shipping company and insurance company. It significantly reduced the claims processing time from months to minutes. Since both the temperature fluctuation data and claims amount are recorded in Blockchain, there is absolutely no chance for the fudging of data. Thus the use case is much more reliable than typical claims processing and it saves time and cost for both the companies
This use case perfectly leveraged the potential of blockchain and can be extended to any industries. Our team has built blockchain use cases for banking and healthcare industries and eyeing to take blockchain to other industries as well.
Now, Got an idea? Ask us how Blockchain can be implemented in your Business! Together we can make your ideas a business reality.
Or you are new to these concepts know the terms of Blockchain.
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