Description:FIELD OF DISCLOSURE
The present disclosure relates to advancements in information technology, specifically focusing on leveraging blockchain technology for automation and optimization in the insurance industry. More particularly, it pertains to a blockchain-based system and method designed to enable real-time, automated insurance claim processing, ensuring enhanced transparency, efficiency, and security.
BACKGROUND
Traditional insurance processes are often characterized by complex paperwork, delayed claim settlements, and a lack of transparency. Policyholders, insurers, and intermediaries frequently face inefficiencies, delays, and disputes in the insurance ecosystem. Additionally, the traditional insurance industry relies heavily on manual processes, which can lead to errors and increased administrative costs.
The emergence of blockchain technology has offered promising solutions to address these challenges. Blockchain, a distributed ledger technology, allows for secure, transparent, and immutable recording of transactions. It provides a decentralized and tamper-resistant platform for various applications, including financial services like insurance.
The US patent application ‘20210050078 discloses an automated system and method for claim adjudication and dispute resolution for healthcare transactions.
The US patent application ‘20220147937 discloses Blockchain subrogation claims with arbitration.
The US patent document, ‘11223647 discloses Cyber safety incremental insurance policy utilizing blockchain underwriting process.
In the current life insurance claims process, the procedures are often manual, time-consuming, and heavily reliant on intermediaries and paperwork. When a policyholder files a claim, it goes through a series of steps, including manual verification of policy details, medical records, and other necessary documents. This process involves multiple parties, such as insurance agents, claim adjusters, and underwriters, leading to potential delays and increased administrative costs.
Prior art in this domain includes several attempts to integrate blockchain technology into insurance processes. Some systems focus on using blockchain for policy management, claims processing, dispute resolution, incremental insurance policy, or fraud detection. While these approaches have made advancements in improving the efficiency and transparency of insurance operations, there remains a need for a comprehensive system that can be completely automated, without human intervention and with just through KYC checks.
OBJECT OF THE DISCLOSURE
It is a general or primary object of the present disclosure to develop a system that automates the entire insurance claim lifecycle, from registration to settlement, reducing human intervention and administrative overhead.
A primary objective is to Enhance Data Security: ensure the confidentiality, integrity, and availability of policyholder and claim data through advanced cryptographic and blockchain techniques.
Another object of the present disclosure is to Increase Transparency: establish a decentralized and immutable ledger that fosters trust among stakeholders by providing real-time access to verified claim data.
Another object of the present disclosure is to Streamline Fraud Detection: Integrate machine learning algorithms and risk-scoring mechanisms to identify and mitigate fraudulent activities effectively.
Another object of the present disclosure is to Improve Operational Efficiency: Reduce delays and operational costs by leveraging smart contracts and real-time validation processes.
Another object of the present disclosure is to Ensure Scalability and Compliance: Create a scalable system capable of handling large volumes of claims while adhering to regulatory and legal standards.
Another object of the present disclosure is to Enhance Customer Experience: Deliver faster claim settlements, transparent operations, and secure handling of sensitive information, thus improving policyholder satisfaction and loyalty.
These and other objects of the present disclosure will become readily apparent from the following detailed description taken in conjunction with the accompanying drawings.
SUMMARY
In accordance with an aspect, the present disclosure provides a blockchain-based system and method for real-time automated insurance claim processing. By leveraging smart contracts and advanced cryptographic techniques, this disclosure addresses the inefficiencies and challenges of traditional insurance systems.
Key Features and Advantages:
Automated Claim Validation: Smart contracts automatically validate claims against predefined policy criteria, significantly reducing the need for manual intervention.
Enhanced Security: Advanced encryption techniques ensure that sensitive data remains protected from unauthorized access or tampering.
Real-Time Transparency: The immutable nature of blockchain ensures that all stakeholders can access a single, verified source of truth, fostering trust and reducing disputes.
Fraud Detection: A claim scoring mechanism assesses risk factors such as suspicious IPs, VPN usage, and claimant credibility, thereby minimizing fraudulent claims.
Cost Efficiency: Automation and reduced dependency on intermediaries lead to substantial cost savings for insurers.
System Operation:
Policyholders register and undergo a KYC verification process, after which their data is securely stored on a blockchain network. Claims are initiated either by the policyholder or authorized entities (e.g., hospitals, government bodies). Smart contracts validate claim details, while additional checks ensure compliance with policy terms and prevent fraudulent activities. Claims are processed and settled based on a multi-tiered scoring mechanism, with flagged claims undergoing a manual audit.
This disclosure revolutionizes the insurance industry by providing a seamless, secure, and efficient claims management solution.
BRIEF DESCRIPTION OF DRAWINGS
The following detailed description of the preferred embodiments of the present disclosure will be better understood when read in conjunction with the appended drawings. The present disclosure is illustrated by way of example, and not limited by the accompanying figures, in which like references indicate similar elements
FIG. 1 illustrates a block diagram of a system (100) of a blockchain-based automated real-time insurance claim processing system, in accordance with an aspect of the present disclosure; and
FIG. 2 illustrates a method of processing insurance claims using a blockchain-based system, in accordance with an aspect of the present disclosure.
DETAILED DESCRIPTION
FIG. 1 illustrates a block diagram of a system (100) of a blockchain-based automated real-time insurance claim processing system, in accordance with an aspect of the present disclosure.
The present disclosure relates to a blockchain-based system (100) and method designed to enable real-time automated insurance claim processing. This system leverages smart contracts (130) and advanced cryptographic techniques (140) to address inefficiencies found in traditional insurance systems. By automating various claim processing stages, the system enhances transparency, security, and cost efficiency while minimizing manual intervention.
The system comprises key functional modules, including a KYC verification module (110), a blockchain ledger (120) for secure data storage, smart contracts (130) for automated claim validation, and a multi-tiered scoring mechanism (250) for fraud detection and improved claim settlement accuracy.
In operation, policyholders begin by registering on the system (100) and completing a KYC verification process (210). This ensures their identity is authenticated and stored securely on the blockchain (220). Claims can be initiated by policyholders themselves or by authorized entities such as hospitals or government bodies (230). Upon submission, the system automatically triggers a smart contract (240) that evaluates the claim details against predefined policy terms. Additional checks are performed to ensure data integrity and prevent fraudulent activities using API integrations (340).
A scoring mechanism (320) assesses risk factors, including suspicious IP addresses, VPN usage, and claimant credibility. Based on the claim score, high-scoring claims proceed to automated settlement, while suspicious or low-scoring claims are flagged for manual audit (350). The auditing module (350) ensures that all flagged claims undergo detailed review, ensuring compliance with legal and regulatory standards.
Throughout the claim lifecycle, stakeholders receive real-time updates via a blockchain-integrated messaging system (330). This ensures clear communication, timely decisions, and reduced uncertainty for policyholders and insurers alike.
The system's advantages include improved efficiency, enhanced fraud detection, and seamless integration with legacy insurance systems. By automating claim validation and leveraging secure blockchain infrastructure, this disclosure significantly reduces administrative overhead, accelerates claim settlements, and ensures a transparent process that builds stakeholder trust.
FIG. 2 illustrates a method of processing insurance claims using a blockchain-based system, in accordance with an aspect of the present disclosure.
At step 202, the method begins with policyholder registration. The policyholder submits their details via a secure interface, after which the KYC verification module (210) verifies the identity using external government or regulatory databases. Verified details are then stored securely on the blockchain ledger (220).
At step 204, the system securely stores the policyholder's information, including nominee details and policy data, ensuring data integrity and security through blockchain’s immutable structure.
At step 206, a claim is initiated. The policyholder or authorized entities such as hospitals or government bodies submit the claim data. The claim details, along with supporting documentation, are recorded immutably on the blockchain ledger (220).
At step 208, a smart contract (240) is triggered to automatically evaluate the submitted claim data against predefined policy terms. The smart contract verifies policy details, coverage limits, and supporting documents for authenticity. Claims that meet the required conditions are moved forward for scoring and potential settlement.
At step 210, the system assesses risk factors through a scoring algorithm (320). This algorithm analyzes elements such as suspicious IP addresses, VPN usage, and the claimant's behavioral patterns to detect potential fraud. Claims with a high score are flagged for manual auditing (350), while low-risk claims proceed to automated settlement.
At step 212, claims flagged as suspicious undergo a detailed review by the auditing module (350). This module involves manual checks for additional verification, ensuring compliance with regulatory standards.
At step 214, approved claims are processed and settled automatically through integrated payment gateways, ensuring fast and secure transactions.
At step 216, stakeholders are notified in real-time regarding the status of the claim via a blockchain-integrated messaging system (330). This ensures transparency and keeps all parties informed throughout the process.
, Claims:We claim (s)
1. A blockchain-based system for automated real-time insurance claims processing, the system comprising: a. a KYC verification module (110); b. a blockchain ledger (120) to store immutable claim data; c. smart contracts (130) for automated claim validation; and d. cryptographic security protocols (140) to protect sensitive information.
2. A method to process insurance claims, the method comprising the steps of: a. Registering policyholders and verifying their identity via KYC checks (210); b. Storing policyholder and nominee data on the blockchain (220); c. Initiating claims via authorized sources, including hospitals and national registries (230); d. Automating claim validation using smart contracts (240) to compare claim details against policy terms; and e. Settling claims based on a multi-tiered scoring mechanism (250).
3. The system as claimed in claim 1, wherein the KYC verification module (110) integrates with external government or regulatory databases for identity validation to ensure policyholder authenticity (310).
4. The system as claimed in claim 1, wherein the claim scoring algorithm (320) incorporates real-time risk factors, such as geolocation anomalies, device fingerprinting, and behavioral analysis, for enhanced fraud detection accuracy.
5. The system as claimed in claim 1, wherein the blockchain-integrated notification service (330) allows stakeholders to customize notification preferences for specific policy updates, claim statuses, and fraud alerts.
6. The system as claimed in claim 1, further comprising API integrations (340) to verify death records and validate claims to ensure compliance with predefined validation criteria.
7. The system as claimed in claim 1, wherein flagged claims are routed through an auditing module (350) for manual review to ensure regulatory compliance and prevent fraudulent payouts.
8. The system as claimed in claim 1, wherein claim settlement decisions are communicated to stakeholders in real-time using blockchain-integrated messaging protocols (360).
9. The method as claimed in claim 2, wherein the blockchain ledger (370) dynamically updates policy terms and endorsements based on real-time inputs from authorized stakeholders, maintaining a tamper-proof history.
10. The method as claimed in claim 2, wherein the machine learning models (380) continuously receive feedback from audited claims to refine fraud detection parameters and improve predictive accuracy.