By State Farm, the U.S-based insurance giant and the military-affiliated bank – United Services Automobile Association (USAA) have reportedly begun testing a blockchain-based subrogation solution using real claims data. The news was officially released by State Farm in a press release on May 30th.
Both insurance companies are utilising blockchain technology to streamline and automate the subrogation process found in insurance claims.
The platform reportedly allows them to automatically gather total payments, net balances, and control a regularly scheduled payment between insurers. State Farm added that the blockchain platform is being tested by using real claims data.
State Farm also further explains that subrogation happens when two insurance companies come into agreeance as to a certain amount of financial compensation which is to be awarded to the claimant’s representative by the at-fault individual’s representative.
This usually takes place as the final phase of any claim process noted State Farm. Mike Fields, Innovation Executive at State Farm, commented on the vast amounts of subrogation claims and argued why the streamlining of the process would be so desirable:
“In 2018 alone, the total amount of dollars demanded and issued through the subrogation process was over $9.6 Billion for all insurance carriers. You can imagine the time and resources required to complete these transactions.”
As per information from the company’s website in December, the insurance agency processes as many as 38,300 claims daily and holds approximately 519,000 accounts in mutual funds.
Lastly, State Farm also announced it was working on a subrogation project at the end of 2018. As per the announcement made on the 30th, State Farm and USAA have been working together on the project since early 2018.
Comments