In this week’s episode we explore how can we automate the claims process with blockchain. Our guest for this topic is Bobbie Shrivastav, Co-founder and Chief Product Officer at Benekiva. Bobbie has 15 years experience in the technology field. In 2015, in addition to becoming a parent Bobbie started working on Benekiva after realising all the inefficiencies in the insurance industry.
What is Blockchain?
Blockchain is magic? That magic pill that we have all been waiting for? Bobbie describes blockchain as a ledger of transactional records that is permanent and immutable, i.e. it can’t be changed. In addition it is distributed across a permission based or permissionless based blockchain and is append only.
What is Benekiva?
Benekiva is a technology platform that is here to bridge the gap between carriers, policy holders and beneficiaries via claims automation, asset retention and data management. Benekiva claims to be the only stand alone claims platform for life and annuity that focuses on the customer.
Challenges of the existing claims process?
In 2016, Bobbie heard a stat that 68% of life insurance goes unclaimed in the United States. According to NerdWallet and USA Today, there is $7.4 billion of unclaimed life insurance in the US alone.
This staggering number is due to the fact that what is wrong with the existing claims process is that it is still in paper and file mode. For the most part the work flow is passing paper and files. It is a process full of friction that generates many barriers for beneficiaries to successfully receive a payout.
Bobbie highlighted the four main problems:
- Inefficient process
- Legacy systems
- As most life insurance policies are filed in paper format it doesn’t enable for a digital kind of communication with the policy holder for updating their details such as their beneficiaries.
- Unclaimed laws prevent insurance companies to keep the money so they have to engage in costly investigative exercises to find the beneficiaries of the life insurance policy.
How have carriers tackled this problem to date?
Up to now most carriers’ strategy for addressing those issues has been through back end admin system upgrades. Whilst there is no issues with updating an insurance company’s core systems, it isn’t an update that has a fundamental impact on claims processes. As it also takes on average 2 – 5 years to do those updates, claims improvements haven’t happened. Additionally as some carriers look at claims as an expense centre, they don’t always invest sufficiently into it to update them.
Benekiva can integrate with insurance companies current systems and also into the updated admin systems once the update is complete. In the meantime Benekiva can start pulling data from legacy systems and provide immediate customer experience improvement. Even if the data is stored in a paper format, Benekiva is able to digitise its content.
Benekiva started looking at using blockchain in two use cases within a private blockchain:
- Immutable ledger – provide an audit trail of the claim process from the moment the policy is generated to when the payout is made
- “Time travel capability” – enables querying at any point in time instantly
Bobbie recognises that this could have been done without blockchain. However, Benekiva understands the importance of being at the cutting edge of technology and to start experimenting with blockchain in order for the future to explore building a consortium.
From a customer experience side blockchain can help guarantee integrity and once the consortium model is enabled it will be able to service the beneficiary very efficiently with the potential to significantly reducing this stat of 68% unclaimed life insurance.
Benekiva’s blockchain has been developed by Fluree.
What does the future look like?
Making the claim process as seamless as possible is Benekiva’s focus for the next few years. Integrating chat bots, smarter “smart form technology”, fraud detection, blockchain and a lot more to make the claim process for the beneficiaries as smooth as possible. Additionally, Benekiva believes there is an opportunity to make the claims staff easier by providing an efficient workplace that isn’t paper base but digital.
Thank you Bobbie for sharing some interesting insights on automating the claims process with blockchain. If you liked this episode, please do review it on iTunes. If you have any comments or suggestions on how we could improve, please don’t hesitate to add a comment below. If you’d like to ask Bobbie a question, feel free to add a comment below and we’ll get him over to our site to answer your questions.