Can Distributed Ledgers Accelerate Insurance Workflows?

Published on Aug 6, 2019

Updated on Dec 13, 2019

The years 2018-19 are the banner years for the US$ 5.17 trillion global insurance sector. However double-booking, counterfeiting, and premium diversions through unlicensed brokers still throb insurance companies. And one of the prime reasons for such unethical activities is the lack of tight coupling between stakeholders. A simple solution to these challenges is distributed ledgers- a contemporary technology that ensures transparency. Distributed ledger technology in insurance can create a collaborative environment for handling information, minimizing instances of fraudulent activities.

How Can Distributed Ledgers Accelerate Insurance Workflows?

Where most insurtech startups and small insurers are looking for “insurance-in-a-box” technology, big players demand bespoke technology to develop distinct capabilities for customer convenience and manage their enterprise workflows. Fortunately, distributed ledger technology solves a major chunk of this problem.

For startups and small to medium size insurtech firms, cloud-based, customizable workflow management products can simplify the processes and create a collaborative work environment. Large enterprises can, of course, afford time and investment for tailor-made technologies suitable for their overall business requirements.

#Smart Contracts

Smart contracts can automatically determine whether to transfer an asset to the nominee or back to the source, or a combination of both. It does not necessarily create a contract or legal act, but can sure validate a condition. For example, Ethereum provides a prominent smart contract framework.

Smart contracts allow credible transactions with or without involving third parties (oracles).

For example, Etherisc uses smart contracts concepts for building insurance products. The fundamentals used for Etherisc’s insuring flight delays product is applicable for insurance products like crop insurance, flood, earthquake, etc.

#Claims Management

Cifas reports a 27% rise in false insurance claims across the UK in the past year. Moreover, insurers identify 1 in every 30 claims as fraudulent. Organizations can track records better with distributed ledgers minimizing the illicit instances.

Blockchain technology allows for automated real-time data collection and analysis. BCG expects Property and Casualty (P&C) insurance has the potential of processing claims up to 3x faster and 5x cheaper than traditional processes.

It can also enhance customer experience by removing indirections due to various touchpoints between him and the claim settlement manager. Distributed ledgers can overall benefit processing time, automating payments, eliminating trust issues, and fraud reduction.

Traditional Insurance Model vs Distributed Ledger Insurance Model: Distributed Ledger Technology in Insurance

#Reinsurance

Reinsurance (passing a whole or part of insurance liabilities to another company) will simplify the sharing of data like bordereau and claims databases. For the insurance companies not preferring to share their client’s data, access rights can be customized in distributed ledgers.

According to PWC research, the reinsurance industry can save up to $10B by increasing operational efficiencies through distributed ledgers.

#Underwriting

“A shared, distributed ledger lends itself to this need for exchanging transparent, trustworthy data in a standard format in real-time.”
Stefan Schrijnen: Director, Insurance, EY

Having accurate real-world data can help underwriters reduce paperwork and measure the assets and risks effectively.

Insurwave, a blockchain-enabled insurance platform uses a distributed database with secure access for insuring shipments across the world. Maersk, the world’s leading shipping and logistics company have partnered with Insurwave for insurance renewal of its fleet of 800 container ships.

In the words of Lars Henneberg, Head of Risk Management at A.P. Moller – Maersk. “A simple dashboard gives us a live overview of how our assets are insured, and our brokers and insurers have access to the same overview. If the location, cargo, or other data about our ships changes, everyone is notified — no delays, no paperwork, no mistakes.”

#Product Design using Distributed Ledger Technology in Insurance

Instead of all-encompassing insurance policies, consumers look for short, custom-built policies that satisfy their immediate needs. Therefore, to stay competitive, insurance companies (and even e-commerce startups) need to consistently build new and relevant insurance products. Expanding features or building new products on the same fundamentals can be effectively realized with strong and transparent ledgers.

AXA’s smart contract product Fizzy is a next-generation Parametric Insurer, which uses transparency as its USP. It provides travel insurance on flight delays and cancellations. The claims displayed on the website are stored in a blockchain and no one can change the terms after purchase. User can buy the insurance online. When the flight is delayed or canceled, the public databases of plane status information automatically triggers the insurance holder’s compensation. The event confirmation executes and closes the claim process instantly.

Precautions to Take With Distributed Ledgers in Insurance

Enterprises should be cautious about sharing access rights on distributed ledgers.
Blockchain transactions are irreversible, therefore every click from an authorized user should be mindful.
Instead of mimicking a trend, insurance companies can deploy the distributed ledger technology to best suit their business requirements.

Conclusion

MarketsandMarkets expects blockchain technology’s share in the insurance market to reach $1.4 billion by 2023.

The insurance industry has already deployed distributed ledger components for insuring flight delays, lost baggage claims, and is expanding to shipping, health, and consumer durables domains.

The future can also witness blockchain, AI, drones, and robotics disrupting the insurance industry together.

Let’s take a trip back in time—2008. Netflix was nothing like the media juggernaut it is today. Back then, they were a DVD-rental-by-mail service trying to go digital. But here’s the kicker: they hit a major pitfall. The internet was booming, and people were binge-watching shows like never before, but Netflix’s infrastructure couldn’t handle the load. Their single, massive system—what techies call a “monolith”—was creaking under pressure. Slow load times and buffering wheels plagued the experience, a nightmare for any platform or app development company trying to scale

That’s when Netflix decided to do something wild—they broke their monolith into smaller pieces. It was microservices, the tech equivalent of turning one giant pizza into bite-sized slices. Instead of one colossal system doing everything from streaming to recommendations, each piece of Netflix’s architecture became a specialist—one service handled streaming, another handled recommendations, another managed user data, and so on.

But microservices alone weren’t enough. What if one slice of pizza burns? Would the rest of the meal be ruined? Netflix wasn’t about to let a burnt crust take down the whole operation. That’s when they introduced the Circuit Breaker Pattern—just like a home electrical circuit that prevents a total blackout when one fuse blows. Their famous Hystrix tool allowed services to fail without taking down the entire platform.

Fast-forward to today: Netflix isn’t just serving you movie marathons, it’s a digital powerhouse, an icon in platform engineering; it’s deploying new code thousands of times per day without breaking a sweat. They handle 208 million subscribers streaming over 1 billion hours of content every week. Trends in Platform engineering transformed Netflix into an application dev platform with self-service capabilities, supporting app developers and fostering a culture of continuous deployment.

Did Netflix bring order to chaos?

Netflix didn’t just solve its own problem. They blazed the trail for a movement: platform engineering. Now, every company wants a piece of that action. What Netflix did was essentially build an internal platform that developers could innovate without dealing with infrastructure headaches, a dream scenario for any application developer or app development company seeking seamless workflows.

And it’s not just for the big players like Netflix anymore. Across industries, companies are using platform engineering to create Internal Developer Platforms (IDPs)—one-stop shops for mobile application developers to create, test, and deploy apps without waiting on traditional IT. According to Gartner, 80% of organizations will adopt platform engineering by 2025 because it makes everything faster and more efficient, a game-changer for any mobile app developer or development software firm.

All anybody has to do is to make sure the tools are actually connected and working together. To make the most of it. That’s where modern trends like self-service platforms and composable architectures come in. You build, you scale, you innovate.achieving what mobile app dev and web-based development needs And all without breaking a sweat.

Is Mantra Labs Redefining Platform Engineering?

We didn’t just learn from Netflix’s playbook; we’re writing our own chapters in platform engineering. One example of this? Our work with one of India’s leading private-sector general insurance companies.

Their existing DevOps system was like Netflix’s old monolith: complex, clunky, and slowing them down. Multiple teams, diverse workflows, and a lack of standardization were crippling their ability to innovate. Worse yet, they were stuck in a ticket-driven approach, which led to reactive fixes rather than proactive growth. Observability gaps meant they were often solving the wrong problems, without any real insight into what was happening under the hood.

That’s where Mantra Labs stepped in. Mantra Labs brought in the pillars of platform engineering:

Standardization: We unified their workflows, creating a single source of truth for teams across the board.

Customization: Our tailored platform engineering approach addressed the unique demands of their various application development teams.

Traceability: With better observability tools, they could now track their workflows, giving them real-time insights into system health and potential bottlenecks—an essential feature for web and app development and agile software development.

We didn’t just slap a band-aid on the problem; we overhauled their entire infrastructure. By centralizing infrastructure management and removing the ticket-driven chaos, we gave them a self-service platform—where teams could deploy new code without waiting in line. The results? Faster workflows, better adoption of tools, and an infrastructure ready for future growth.

But we didn’t stop there. We solved the critical observability gaps—providing real-time data that helped the insurance giant avoid potential pitfalls before they happened. With our approach, they no longer had to “hope” that things would go right. They could see it happening in real-time which is a major advantage in cross-platform mobile application development and cloud-based web hosting.

The Future of Platform Engineering: What’s Next?

As we look forward, platform engineering will continue to drive innovation, enabling companies to build scalable, resilient systems that adapt to future challenges—whether it’s AI-driven automation or self-healing platforms.

If you’re ready to make the leap into platform engineering, Mantra Labs is here to guide you. Whether you’re aiming for smoother workflows, enhanced observability, or scalable infrastructure, we’ve got the tools and expertise to get you there.

Can Distributed Ledgers Accelerate Insurance Workflows?