Insurance companies State Farm and USAA have announced they are testing whether a blockchain solution could speed up insurance claims.
In particular, they are focusing on the auto claims subrogation process, which involves the recovery of costs from the at-fault party’s insurance company.
“In 2018 alone, the total amount of dollars demanded and issued through the subrogation process was over $9.6 billion for all insurance carriers,” said Mike Fields, Innovation Executive, State Farm. “You can imagine the time and resources required to complete these transactions.”
At the moment, the process is time-consuming and is done manually, often requiring mailing checks.
The tested blockchain will therefore be responsible for “compiling all subrogation payment amounts, netting the balance, and facilitating a single payment on a regular basis between insurers.” The transaction records would be verifiable.