The insurance giant from the United States, State Farm, decided to partner up with the military-affiliated bank United Services Automobile Association (USAA) and test a blockchain-based subrogation solution with real claims data. State Farm and USAA confirmed the development in an official press release on May 30, which was featured on many best cryptocurrency news sites.
Right now, the two insurance titans are using blockchain technology in order to automate and streamline the subrogation process in the insurance claims. However, the platform will benefit State Farm and USAA by conducting regularly scheduled payments between issuers. As State Farm noted, the blockchain solution is being tested with real claims data.
The company was featured in the coming altcoin news for its full explanation of the blockchain initiative. As they said, subrogation occurs when two insurance companies agree on some amount of financial compensation that will be awarded to the claimant’s representative by the individual (at fault) and their representative. This phase marks the final phase of the claim process, the announcement notes.
“The blockchain solution we are working on has many potential benefits,” said Ramon Lopez, Vice President, Innovation, USAA. “It helps us automate a manual process securely and creates a permanent transaction record of each payment which can easily be verified for accuracy. It also has the potential to decrease the amount of time for consumers to receive their deductible reimbursement.”
Knowing this, State Farm and USAA are now tackling the large scale of subrogation claims and are alluded to why streamlining the process would be ideal and desirable. As the Innovation Executive at State Farm Mike Fields noted:
“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.”
The official website of State Farm shows that the insurance agency processes more than 38,000 claims daily and holds around 519,000 accounts in mutual funds. As the latest cryptocurrency news show, this project between State Farm and USAA confirms that the companies were working on the project for some time. Today’s announcement confirms the partnership and states that the two companies have been working on the project since early 2018.
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