Event-based Smart Contracts for Automated Claims Processing and Payouts in Smart Insurance

Abstract

The combination of blockchain technology and smart contracts has become a viable way to expedite claims processing and payouts in the quickly changing insurance industry. Enhancing efficiency, transparency, and reliability for the industry may be achieved by automating certain procedures and initiating them on predetermined triggers, smart contracts that is event-based. Conventional insurance procedures can be laborious, slow, and prone to human mistake, which can cause inefficiencies and delays in the resolution of claims. This research proposes a simplified system that automates the whole claims process from submission to reimbursement by utilizing blockchain technology and smart contracts. The suggested method does away with the requirement for human claim filing by having policyholders' claims automatically triggered by predetermined occurrences. These occurrences might be anything from medical emergencies to natural calamities, enabling prompt and precise claim start. The whole claims process is managed by smart contracts that are programmed with precise triggers and conditions, guaranteeing transaction immutability, security, and transparency. Moreover, reimbursements are carried out automatically after the triggering event has been verified, disregarding conventional bureaucratic processes and drastically cutting down on processing times. This strategy decreases the possibility of fraud and disagreement while also improving operational efficiency by combining self-executing contracts with decentralized ledger technology. Insurance companies and policyholders will both eventually profit from an accelerated, transparent, and reliable claims processing procedure thanks to the use of event-based smart contracts. A Python-implemented system achieving 97.6% accuracy using the proposed method, demonstrates its efficacy and reliability for the given task.