Insurance firm State Farm is testing a blockchain solution that could speed up the subrogation process for auto claims.
State Farm is the largest property and casualty insurance provider in the United States with corporate headquarters in Bloomington, Illinois. Its nearly 19,000 agents and approximately 65,000 employees serve approximately 83 million policies and accounts – approximately 81 million auto, fire, life, health and commercial policies and approximately two million bank accounts. State Farm is ranked 36th on the 2018 Fortune 500 list of largest companies.
The company announced that its is currently testing an enterprise blockchain solution against existing subrogation processes to determine if it can be a viable product for insurance industry adoption and bring value to customers. Subrogation refers to an insurer’s right to recover the amount it has paid for a loss from the party that caused the loss. Subrogation is typically the last part of an insurance claims process where one insurance company recovers claim costs it paid to its customer for damages from the at-fault party.
To understand how an enterprise blockchain solution can be used to reduce the time needed to complete the subrogation process, State Farm is working with another insurance provider. The company wants to see if the solution can securely and automatically compile all subrogation payment amounts, net the balance and facilitate a single payment on a regular basis between insurers.
Mike Fields, innovation executive at State Farm, said that at present, subrogation is a relatively manual, time-consuming process often requiring physical checks to be mailed on a claim-by-claim basis between insurers. Fields believes that the blockchain solution they are working on has many potential benefits.
“It helps us automate a manual process securely and creates a permanent transaction record of each payment which can easily be verified for accuracy,” Fields said. “It also has the potential to decrease the amount of time for consumers to receive their deductible reimbursement.”
Source: Read Full Article