Blockchain in the Insurance Industry: Use Cases and Applications

Blockchain in the Insurance Industry: Use Cases and Applications

İsmail Yıldırım (Hitit University, Turkey)
DOI: 10.4018/978-1-7998-3632-2.ch007

Abstract

New technologies that will be developed in the future will determine the place of Blockchain technology in our lives. It is certain that blockchain technology, which has the potential to be used in every field from smart phones to the health sector, will be a technology that will be frequently encountered in the future rather than simply being used in some sectors. What will determine the areas of use of Blockchain technology and how much it can be used depends on what future security, cost, and speed it can do. Blockchain, which can be used in the insurance sector, will help to keep track of accidents, material, and moral losses during the insurance period and keep track of all records very easily. It is expected that this technology, which is expected to be useful in eliminating the minute information problems in the insurance sector, can be very helpful in preventing insurance frauds, and it is expected to have a preventive effect in defrauding insurance and citizens. This chapter discusses how blockchain technologies will transform the insurance sector and their future uses.
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What Is Blockchain?

There is no clear definition of Blockchain. Satoshi Nakamoto’s first introduced the concept when he was disseminating the concept of Bitcoin in 2008. He defined Blockchain as information blocks connected by encryption (Jacobovitz, 2016). The essence of Blockchain technology is the collection of previously secured data into a technical schema. This technical scheme consists of blocks formed by the encryption of multiple and distinct nodes in the system. Therefore, Blockchain is also referred to as a chain of blocks. There are many blocks in the Blockchain. These blocks are connected to each other in a linearly and chronologically. These blocks have digital fingerprints that confirm the validity of the information stored in each block (Tian, ​​2016). Each block also contains a block sequence, a block header summary, a summary of the title of the linked block and the preceding block, the difficulty value, the time stamp of the time the block was formed, the random value, and the values ​​of the transfer operations (Figure 1). All transactions can be monitored by all stakeholders in the network.

Figure 1.

How Blockchain Works?

978-1-7998-3632-2.ch007.f01
Source (Social Rush, 2018)

Key Terms in this Chapter

Service Orientation: Cyber-physical systems, people and smart factory services are offered via the Internet of Services.

Cloud Computing: For computers and other devices, which can be used at any time and enabling shared computing resources between users, is the general name of internet-based information services.

Autonomous Administration: Cyber-physical systems are the ability to make their own decisions within smart factories.

Smart Contracts: It was introduced by Nick Szabo in 1994 according to some sources and in 1996 according to some sources. Szabo, which is both a legal and programming infrastructure, defines the term “contract” as dizi a series of agreements or promises between agents/agents.”

Modularity: Provides flexible adaptation system to intelligent factories for changing requirements of individual modules.

Internet of Things: A network of physical objects connected to each other or to larger systems. It is envisaged that the objects can work together over the Internet infrastructure by marking them with a single key and thus creating values greater than the sum of the small parts.

Real-Time Capability: Ability to collect and analyze data. This structure makes fast understanding.

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