Using blockchain in health and life insurance: Seeking wisdom from the crowd

Health and life insurers are among the many players scrambling to determine how blockchain could be adapted to improve the way they maintain records, execute transactions, and interact with stakeholders. Key questions center on whether blockchain’s unique attributes could help insurers cut costs, manage risk, improve customer service, grow their business, and, ultimately, bolster the bottom line.

Deloitte’s Center for Health Solutions and Center for Financial Services recently partnered on a crowdsourcing research project to look into how health and life insurers might leverage blockchain and related technologies to strengthen key elements of an insurer’s value proposition. The crowd’s mission was to brainstorm how this emerging technology could be applied by insurers in the next five to 10 years to improve current standard operating procedures and systems while enhancing the customer experience.

So, what did we find? Six use cases that are the most realistic and promising for health and life insurers. While it is still early in the adoption curve, the applications explored here provide a starting point for insurers looking to unlock the potential of blockchain. Scroll down to explore these use cases and download the report for additional insights.

Six use cases for health and life insurance companies

In this paper, we examine the feasibility and implications of these use cases in terms of how blockchain could directly and indirectly improve an insurer’s basic processes and business models. The use cases address improvements in an insurance company’s operational functions as well as dealings with providers, intermediaries, and policyholders, thereby improving the customer experience, enhancing product value, and laying the groundwork for greater consumer choice in the market. The end game is to decrease costs, improve operational effectiveness, and strengthen relationships with the insured. The following are the use cases presented in this report:

1. Moving towards interoperable, comprehensive health records
   The added security and ability to establish trust between entities are two reasons why this technology can help solve the interoperability problem better than today’s existing technologies.
2. Supporting administrative and strategic imperatives with smart contracts
   Blockchain could automatically collect records of agreements, transactions, and other valuable information sets, then link together the information and act on the data using smart contracts.
3. Detecting fraud more effectively
   When fraudulent information is submitted to a life or health insurer via false claims, falsified applications, or other channels, smart contracts can help determine if the submission is indeed valid.
4. Improving provider directory accuracy
   Unique provider directories could leverage the technology’s decentralized consensus protocols to allow providers and insurers to update listings more quickly and easily.
5. Simplifying the application process by making it more client-centric
   Providing an easier-to-access, more comprehensive set of medical records on a blockchain could infuse comfort and peace of mind into what, for many, is now an intrusive and often discouraging application process.
6. Facilitating a dynamic insurer/client relationship
   Electronic health records securely stored on a smart contract could be the foundation for integrating a wide variety of wellness-related behaviors into the insurer/client dynamic.

Health and life insurers should be bold when it comes to blockchain. The greatest opportunities may extend beyond making incremental improvements in current business models to harnessing blockchain’s unique attributes to create entirely new types of interactive policies and launch innovative services that add value and grow the business.

Moving the needle towards interoperable health records

Blockchain’s added security and ability to establish trust between entities are two reasons why it can help solve the interoperability problem better than today’s existing technologies. An interoperable and comprehensive health record on the blockchain would most likely be pulled directly from existing EHRs in hospitals and physician offices. Today’s health records are typically stored within a single provider system. With blockchain, providers could either select which information to upload to a shared blockchain when a patient event occurs, or continuously upload to the blockchain.

Some of today’s interoperability challenges will remain with the integration of blockchain. However, the benefits of establishing an interoperable, comprehensive health record, both in the short and long term, should push stakeholders to explore this technology and may impact how health information exchanges operate in the future.

What should insurers be doing about blockchain?

• Insurers face intensifying pressure to reduce administrative costs, an area where blockchain might make a big impact by modernizing fragmented legacy IT systems, improving efficiency, and bolstering competitiveness.
• The insurance industry’s aging workforce necessitates pursuing increased automation, which can be enabled by blockchain capabilities.
• New systems, processes, security protocols, and business models are needed to respond to rising customer expectations for tailored services, heightened privacy, innovative products, added value, and competitive pricing from their insurers.
• Existing IT departments may not have the manpower or expertise to get blockchain off the drawing board and into the field. Therefore, insurers should identify and perhaps even invest in potential technology partners on blockchain’s cutting edge, as well as consider engaging with outside experts in blockchain development.
• To realize blockchain’s full potential as a business transformation opportunity, insurers will need to leverage a number of other technologies in tandem, including advanced analytics, artificial intelligence, and IoT, as well as collaborate with a wide range of stakeholders.
• Individual insurers and the industry as a whole should proactively work with broader health care consortiums to make sure the development of standards facilitating blockchain-enabled interoperable data repositories meets their own long-term commercial interests.
• Insurers should strategize, experiment, and develop proofs of concept to leverage blockchain to create next-generation products and services featuring more interactive relationships with their policyholders, while future-proofing against encroachment from other industry sectors and non-traditional competitors.

Based on our crowdsourcing exercise and analysis, health and life insurers should consider a number of factors when looking to launch blockchain projects and position themselves to be among the early beneficiaries of potential use cases.