Blockchain Development Cost For Insurance Industry

Blockchain is finding new areas of expertise in various realms. The fascination of businesses with this technology will only increase by leaps and bounds. From entertainment to real estate, education, gaming, and healthcare, it has become omnipresent. Blockchain for Healthcare Sector has solved several problems because the distributed ledger stores the patient's records. These are then accessed very conveniently. Moreover, it has served to be beneficial in supply chain management.

Apart from mainstream healthcare, its application in the insurance domain is also significant. The whole concept of providing end-to-end encryption between the parties is the real reason behind the success of blockchain implementation in the insurance sector. As per Mordor Intelligence (From 2019-2027), Asia-Pacific is the largest growing market for insurance. Also, it will register a CAGR of 63.4% in that duration. Similarly, according to the reports by MarketsandMarkets Research, the major market players in insurance are Auxesis Group (IN), BitPay(US), Guard Time (Estonia), Bitfury(US), etc.

Cost Estimation For Blockchain Development for Insurance Company

Insurance companies are implementing blockchain technology, and businesses are finding it a great way to secure their data, so it does not get leaked. The biggest issue for insurance companies is that they are compelled to sell the insurance at a price that is rampant in the market. So, cost reduction is the first thing that needs to be done. This is the key factor for the insurance companies if they want to become valuable.

The cost implementation of Blockchain in insurance is dependent on the following factors;

Decentralized Insurance App Cost Depending Upon The Development Process

Consulting

When you are looking to develop a platform or an application that you have no idea about. Then, the only thing that comes to the resume is to hire a blockchain consulting company that can solve your project-related issues. Consulting also requires a certain “%” of the total cost. This percentage might differ for various companies. So, it's necessary to analyze blockchain firms so that you can further follow the process.

Choosing The Blockchain Development Firm

After proper consultation with business analysts, it's time to take the leap of faith and hire a blockchain development company. Our developers have precise information about the entire development process. A massive amount is spent at the development stage as it involves the back-end, and front-end development, picking the right frameworks, top programming languages, and secure databases.

Designing

The designing part charges are midway between the developing and consulting. The main job of the designers is to make the user experience smooth. It incorporates the UI/UX design i.e, user experience and user interface. The user interface needs to be intuitive so that the overall look of the built-block insurance app looks pleasing. The final product should grab the attention based on the aesthetics. Similarly, in the case of the user experience, the satisfaction of the clients comes first that is based on the useability and interactivity of the product.

Integrated Features

The blockchain in the insurance sector requires an application that has fantastic features. The feature inclusion charges are not constant, as it entirely depends upon the client’s requirements. Some of them just want the basic features, while others may want the add-on features. Wherever customization is required, the prices go up.

Quality Assurance

The performance and the sophisticated working of the application depend upon the testing. Whatever bugs and errors are there in the product need to be removed. Software testing charges moderately, but depending upon the size of the enterprises, the cost could vary.

Development Process	Cost Prediction (% of the budget)
Consulting	10-15%
Blockchain Companies	50-60%
Designing	20-25%
Integrated Features	35-45%
Quality Assurance	15-20%

Size Of The Firm

The size of the blockchain firms also plays a pivotal role in deciding the budget for blockchain insurance applications. In the case of startups, the employees are significantly lesser, so they will charge less. On the other hand, medium-scale firms have team members somewhere between the large and small ones. Therefore, they will charge in the average numbers. At last, the large-sized firms have more employees, which means that their pricing will be way more than the other two.

Size Of The Firm	Cost Prediction
Small Scale	$25000-35000
Medium Scale	$45000-55000
Large Scale	>$55000

Complexity Of The Application

The level of complexity involved in the application plays a vital role in the blockchain app development cost. The more complications, the charges will spike up, and the lesser the complexities, the charges will go down. Now, the intricacies are also dependent on a lot of factors.

The first one is the low complexity; here, the basic procedure smart contract development for insurance is followed. Additionally, the payment apps are built via prior cryptocurrencies. The moderately complex applications are the apps that are partially decentralized. So, these require platforms like ethereum, R3 Corda, Hyperledger, Tezos, and more.in the same way, the highly complex ones are required to be built from scratch and need to be completely decentralized. This takes a lot of time and effort, which is directly proportional to the charges.

Complexity Of The Application	Cost Estimation
Low Complexity	$ 30000-45000
Medium Complexity	$50000-75000
High Complexity	>$75000

Development Resources

The resources that work on any given project also determine the cost of the blockchain-based insurance app. The resources are generally from the in-house team, agency, or freelancers. The quality of work will differ in all these cases.

The in-house team is dedicated entirely to the blockchain; they tend to deliver the project on time, due to which the charges will be more. This is because it's still in the starting phases, so the developer cost will surely be higher.

The next one is the freelancers, whose work cannot be measured as their project delivery time cannot be estimated well. Plus, a risk factor is involved regarding the project's completion.

The last one is the agencies that regularly provide development services to their clients. Their charges are going to be more than the freelancers.

Contact Our Team to get accurate information about the cost estimation of the blockchain-based insurance app.

Why Is There A Need For Blockchain In The Insurance Industry?

Blockchain is a secure network that helps eliminate obstructions in the business process. The execution of smart contracts aids in the unnecessary interference of the third-parties. So, the manipulation is entirely wiped off. This technology imparts accuracy, cost reductions, transparency, and effective gains. The customer experience is made just superb by making advancements in speed and reliability. In insurance, the claims cycle is speeded up with utmost efficiency thereby resulting in supreme customer satisfaction. There is a seamless interaction between the insurance companies and the clients.

Health Insurance

There are a lot of discrepancies in the health insurance sector, as medical records are sometimes fake. Such things require a large amount of time to find faults. Blockchain can detect such frauds in the blink of an eye. The health insurance claim is mostly required at a time when the person is in critical condition, so to not waste more time, this fantastic technology is used.

Fraud Detection

There are many cases where insurance companies have so many clients. To find out the fraudsters among them is quite a task. The conventional methods are going to take plenty of time to go through every phase. Blockchain handles such situations very well by looking at the details stored about a person/company promoting risk prevention.

Casualty Insurance

This involves insurance related to commercial vehicles where human-based entry can result in errors in processing the claims. The paper contracts are modified into programmable codes. Blockchain technology, with its ultra features, allows the making of claims at high speed with the help of shared ledgers. Even payment-related transactions are automated to maintain accuracy and efficiency.

Also Read: Implementation Of Blockchain In Healthcare

Advantages Of Blockchain In Insurance

Automation

The involvement of the smart contracts is purely automated, where the codes are executed without any human intervention. This technically means the work is performed without any resources. Thus the cost spent on hiring is also reduced that ultimately leading to lower premiums. Insurance companies can perform processing at a rapid speed, to begin with, the swift payouts to the policyholders.

Value For Money

Blockchain allows insurance companies to work in an aggressive environment. Players from all walks of the industry anticipate the finest money and a fabulous digital experience. This technology adds extra value to the insurance industry. This adds a positive addition to the quality, cost, and sustainability.

Fraud Reduction

Fraud is one of the biggest problems prevalent in the insurance industry. Various insurance companies are bombarded with fake claims, making it hard for them to determine which one is authentic. There have been some smart techniques introduced, but they need to be more capable of finding out the defaulters with great precision. With smart contracts and top-notch analytics, the chances of performing fraud become negligible. Access to the ledger is responsible for reducing fraud on the blockchain network.

Enhanced Reliability

Trust is the bigger reason which holds customers’ attention. Blockchain has an in-built feature of immutability that uplifts reliability. The role of consensus algorithms ensures top-level security and develops certainty between the blockchain network and the strangers. Smart contracts aides in quick and reliable transactions, due to which theft is reduced. This is helpful for insurance companies to track the constituents in real-time.

Real-World Blockchain Insurance Use Cases

The blockchain insurance use cases tend to solve the irregularities that were present in the insurance sector. Digitization with the distributed ledger is the main reason behind the efficient operational working of this domain. Some of the blockchain insurance use cases are mentioned below;

• KYC and AML Process
• Handling Claims
• Reinsurance Procedures
• Distribution approach

Read more: Use Cases For Blockchain In Insurance

Conclusion

Blockchain, and insurance have become synonymous with one another. Together they have upgraded the already existing P2P models by simply computerizing the tasks and holding the valuable possessions on the smart contracts. Blockchain in insurance creates a trustworthy environment that is absolutely tamper-proof.

Suffescom Solutions Inc. is a Blockchain Development Company with the prowess of building robust blockchain-enabled platforms. We have 6+ years of experience in blockchain, NFT, and smart contracts development that will help fuel your blockchain insurance project.

• Blockchain Development Cost