Blockchain Distributed Ledger for Insurance Claim Data Verification
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Solution Overview
Problem
The First-Notice-Of-Loss (FNOL) process in insurance claims is hindered by lengthy communication delays due to traditional methods like phone calls, emails, and mail, which are inefficient and costly compared to automated solutions.
Innovation Solution
Implementing a blockchain-based distributed ledger system for data input, collection, and verification, utilizing APIs and a data curation service to automate and secure the process, ensuring tamper-proof, resilient, and auditable storage and tracking of insurance claim data.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If traditional communication methods (phone calls, emails, mail) are used for data input, collection, and verification in insurance claims, then human interaction and flexibility are maintained, but processing time increases significantly and costs increase
Solution Approach 1:
The patent replaces mechanical communication systems (phone calls, emails, physical mail) with an automated electronic data exchange system based on blockchain technology. This substitution eliminates human intervention in routine communication tasks, reducing processing time from weeks to hours while maintaining data security and verification capabilities through cryptographic protocols and smart contracts.
Solution Approach 2:
The patent introduces a blockchain-based intermediary layer that facilitates automated data exchange between insurance carriers, adjusters, and vendors. This intermediary system uses smart contracts to automatically verify and process claims data, eliminating the need for lengthy back-and-forth communications while ensuring data integrity and reducing processing delays.
2Extent of automation
If traditional communication methods are used, then system simplicity is maintained, but automation level remains low and operational costs increase
Solution Approach 1:
The patent segments the insurance claims processing system into modular components: blockchain infrastructure for data storage, smart contracts for automated verification, APIs for data exchange, and user interfaces for interaction. This segmentation enables targeted automation of specific tasks while maintaining overall system manageability and reducing operational costs through efficient resource allocation.
Solution Approach 2:
The patent creates a universal blockchain-based platform that handles multiple functions including data input, collection, verification, and exchange across different insurance carriers and vendors. This multi-functional system reduces the need for separate communication channels and manual processes, increasing automation while managing complexity through standardized protocols and interfaces.
3Reliability
If manual data verification processes are used, then data accuracy can be ensured through human review, but processing time increases and fraud risks remain
Solution Approach 1:
The patent implements automated feedback loops where smart contracts continuously verify claims data against predefined criteria and previous transactions. The system automatically flags anomalies, requests additional information, and validates data integrity through cryptographic verification, maintaining high accuracy while processing claims at speeds impossible for manual review.
Solution Approach 2:
The patent performs preliminary data verification and validation before claims processing begins. Smart contracts automatically check data integrity, validate vendor credentials, and verify claim eligibility in advance, ensuring accurate verification while accelerating subsequent processing steps by eliminating the need for repeated manual checks.
Data Source
AI summary
Embodiments are described herein for data input, collection, and verification using information stored on a distributed ledger, such as a blockchain. A distributed ledger may securely store data relating to an insurance claim, for example. Use of a distributed ledger may provide an immutable, readily auditable record of the history of the insurance claim.