Blockchain for Aerospace Insurance
Blockchain is essentially a record, a ledger of data, or digital events that is distributable on multiple different parties or systems. The record is tamper-proof once registered and will exist on the block forever. This concept might sound farfetched to be applicable to the insurance industry, let alone Aerospace Insurance. But upon further in-depth view, blockchain does have a promising potential to alleviate pain points in the industry.
According to Deloitte, generally there are 7 pain points in insurance industry, but 4 does stand out when it comes to Aerospace insurance in particular, namely :
Based on the aforementioned characteristics of blockchain, 3IPK has assessed how can it alleviate the issue that Aerospace industry is currently facing :
Even Though most data on Web 2 era has been digitized, some processes are still inefficient. Take for example digital signatures. To exchange confirmation between parties, it requires a back and forth transfer of physical signatures to avoid fraud or forgery. The digital version of these signatures are mostly deemed invalid as they are prone to forgery. But with blockchain, confirmation,? digital signature can be assigned using a tamper-proof technology, with private keys assigned to decision makers that are nearly impossible to forge. This can make the process of information exchange a lot faster and more efficient.
Beyond that, specifically in the aerospace industry, exchanges of information such as complex configurations, historical data, maintenance records and more can be shared with confidence to multiple parties related to insurance, if it was fortified with blockchain. Thus sophisticated data points that are originally prone to misconfiguration, misplacement or forgery can be recorded forever in a tamper-proof blockchain,? increasing the information integrity that all parties received, including the insurance issuer and receiver.
2. Fraud prone
As barriers to enter the Aerospace industry have reduced over time (after years of technological advancements since the moon landing,) private sector and even individuals are now able to contribute or join the space race. It’s great progress indeed, but as the industry gets crowded, more bad actors try to gain profit from defrauding the system. In basic insurances like home or life insurance, people have often tried to defraud the system, the opportunity has grown even larger in vast and complex systems like aerospace insurance.
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The opportunity for taking advantage of insurance policies often comes from the smallest section of the whole agreement, especially as the aerospace industry is made up of multiple granular details. Insurance may be defrauded with faulty components that are deliberately applied to a rocket, a deliberate mis-maintenance, and many more details that are prone to fraud. This problem can be minimized by applying blockchain technology where all parties involved can have access to component data, and maintenance records and where all of this data is? tamper proof and traceable, hence the agreement can move forward in a fair manner.
3. Fragmented data source, manual claims and processing
Aerospace industry is made up of multiple fragments of components, whether it be rocket building, satellite launch or other operations as it requires complex components and multi-year operations to develop. That means that along the way, thousands of data points will be created spanning months and even years of operation. With conventional record keeping, this can be a major challenge as they are prone to get lost, destroyed, tampered or hacked. But with blockchain, tamper and hack-proof databases can be created out of these processes and consolidated into a searchable repository that all parties can access. Claims and processing can also be made easy with this system as confirmation can be done using blockchain as well and investigation of cases can be made more efficient by tracing through these data points on the blockchain.
From all the improvements above, it requires expertise on blockchain technology (to implement) and the right time to improve the status quo is now, as the aerospace industry is growing exponentially year by year and the workflow and data processing are getting more and more complex. 3IPK can assist the blockchain transformation of any aerospace and aviation enterprise, with our multi year experience as well as expertise in both blockchain and aerospace industries.
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