The transformation of the insurance sector, especially the health segment of it, began suddenly and simultaneously with the advent of the pandemic; from an ancient Goliath that had stayed true to its traditional form for ages, it has turned into an agile, young David who can take down most challenges fearlessly. And we dare say this is just the beginning. There’s still Web 3.0 to account for since it’s projected to be tailored for the insurtech arena.
What’s the need for Web 3.0?
From time immemorial, insurance companies have been handling and processing information, vast volumes of it, and are good at it. But they fail miserably with regard to how to process it quickly and accurately. Even at present, the validation of health insurance claims is as per the Web 2.0 processes, wherein there is human interaction with machines, thus causing delays and errors.
As an offshoot of fintech, insurtech entered the picture to transform the existing business model of the sector by leveraging AI, ML, distributed databases and other forms of smart innovative technologies, similar to what Web 3.0 plans to do.
What’s Web 3.0?
Web 3.0 is a Semantic Web that’ll be crafted from smart tech and decentralized data architecture, to make the leveraging of blockchain technology to build an open, safe and transparent environment possible. It’ll also facilitate network users to interact on their own, while being responsible for that data ownership. The buzz is that Web 3.0 will craft super efficiencies in the financial system and deliver a smarter user experience than ever possible previously. And thus the bancassurance sector will be able to help its users more roundly.
It is believed that Web 3.0’s focal point will be taking all volumes of the big data and, instead of storing it in centralized repositories, connecting it in a decentralized fashion so that computers can understand and process information as intelligently as human beings. This will allow users and machines to connect more seamlessly with data, and the result will be one version of the internet that’s more intelligent and hence powerful in its ability to work with information.
Gradually, machines will be empowered enough to interpret even the semantics or the meaning of the information and thus be capable of delivering radically smarter user experiences.
With this Web 3.0 technology, we are looking forward to making filing health insurance claims super easy and staking false claims virtually impossible. Following the success of Web 3.0, the world will finally be ready for Open Banking to become a reality.
Benefits of Web 3.0 that’ll profit health insurance
Let’s start with the lowest hanging fruits: Web 3.0 is a cost, effort and time efficient option. Research holds that with this smart blockchain use case in the health insurance segment approximately 15-25 percent fraud will be purged, which is savings of $ 10 billion across the industry. Buyers can expect insurance premiums to also fall as processes become prompt, safe, and error-free.
Then there’s the issue of higher security offered by Web 3.0’s data decentralization in the industry. Policyholders will feel safer about their personal information being encrypted blocks on the blockchain. Since employee & Group Health Benefits rely on exchange of private / confidential information and the data stored on the blockchain distributed ledger is unalterable, it’s reliable and accessible in a secure fashion. The insurers, brokers, employers and employees use multiple systems, emails, excel sheets, documents to get quote and benefits needed, consumes lots of time, efforts and delay the entire process, increases the risk of data but Web 3.0 will reduce the risk.
And all of these changes will result in an automated process so streamlined, that most forms of transactions will become transparent and simpler. Beginning with underwriting, claims, reinsurance, and payouts, all of these mini-processes will chug along flawlessly and smoothly.
Provider / hospital / pharmacy / wellness / doctors for employees can access information, consulting, and provide real time benefits on single platform. Not only this, customers can get instant claims as providers will have access to universal health data on Web 3.0, this will fast pace the insurance process.
The Semantic Web is yet to arrive in the sector but savvy insurtechs are already leveraging its power to convert legacy systems into digital, customer-centric and thus customizable ones that offer affordable solutions to clients. If the entire power of Web 3.0 is harnessed by the sector, the upgrade could make the sector future-ready at one go.
The author Layak Singh is CEO at Artivatic.AI. Views expressed are personal.
(Edited by: Kanishka Sarkar)