April 27, 2018, PRNewswire, Tallahassee ̶ The emerging distributed ledger software technology Blockchain, being developed for use in financial transactions, has applications in how we manage insurance information, too. It could one day be used to reduce Florida’s nearly 27% rate of uninsured drivers – the highest in the nation – while providing added convenience and money-saving efficiencies to both consumers and insurance companies. Blockchain technology is also touted as an answer to the current problem of data breaches and compromised personal information.
While Blockchain applications are still very new to the insurance industry, there are applications underway right now, according to Christopher McDaniel, Executive Director of the RiskBlock Alliance, appearing on The Florida Insurance Rounduppodcast.
“Nationwide Insurance just implemented Blockchain for proof of insurance, simplifying verification of automobile insurance coverage in real time and eliminating the need for paper ID cards.” McDaniel pointed out that right now, neither party in an auto accident really knows the other person has auto insurance. They have paper insurance cards that say they do, but that insurance may have since been cancelled, prior to the accident.
“Basically inside the mobile phone app is a plug-in, so that the two people involved in the accident can basically tap their phones together and in a matter of seconds it goes out to the Blockchain and it comes back down and says the other person has insurance and how much coverage they have,” explained McDaniel.
Florida tops the nation in the number of uninsured drivers on its roadways at 26.7%, according to the latest studyby the Insurance Research Council. The average cost of an uninsured motorist claim is about $20,000.
Florida State Senator Jeff Brandes (R-Pinellas County) believes in Blockchain’s potential, especially in the Sunshine State, and is urging greater awareness of the technology among his fellow legislators.
“My sense is that this is the next wave in the insurance space for transactions and they (legislators) need to be able to understand and begin to find and contemplate some of the opportunities that come along with this new technology,” he shared with McDaniel and podcast host Lisa Miller, a former Florida deputy insurance commissioner.
Brandes and McDaniel agreed that Blockchain’s proof of insurance capability could be expanded to proof of driver licenses, which would assist law enforcement and Florida’s Division of Highway Safety and Motor Vehicles to identify people who shouldn’t be driving. Brandes said that seems like an area where some legislative authority would be required to pursue.
“These are exciting times indeed to look at technology that can help us work smarter – not harder – while providing enhanced consumer value and protection,” said Miller.