State Farm, the U.S.-based insurance company is testing the blockchain technology to speed up the process of claim settlements. State Farm specializes in providing insurance and financial services, especially in the auto sector.
Being among the top 50 in the 2018 Fortune 500 list of companies, it processes over 38,000 claims daily. Moreover, it has also got nearly 519,000 accounts in mutual funds.
State Farm Testing Blockchain to Speed Up Subrogation Process
State Farm said that it’s testing blockchain solutions to speed up the subrogation process in the insurance sector. The Cambridge dictionary defines subrogation as “the ability that an insurance company has to get the money it has paid to a customer, back from the person who caused the accident, damage, etc.”
However, State Farm has collaborated with another insurer to test the blockchain solution. The insurance giant wants to see whether blockchain can effectively reduce the time for the subrogation process while compiling all the subrogation payment amounts.
Mike Fields, innovation executive, State Farm, said,
“Today, subrogation is a relatively manual, time-consuming process. It often requires physical checks to be mailed on a claim-by-claim basis between insurers. You can imagine the time and resources required to complete these transactions.”
Fields further praised the blockchain technology explaining how it can streamline the subrogation process. He adds that blockchain “helps us automate a manual process securely and creates a permanent transaction record of each payment.”
Fields adds, “It [blockchain] also has the potential to decrease the amount of time for consumers to receive their deductible reimbursement.”
Blockchain In the Insurance Sector
Several insurance companies across the globe are testing blockchain to streamline their operations and provide its customers with better claim-settlement services.
In September, LIMRA and RiskBlock Alliance joined hands to test the blockchain application in the life insurance sector. Similarly, in October 2018, insurance brokerage giant, Marsh, teamed up with IBM to blockchain-based proof-of-insurance for a broader audience.
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