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State Farm, a group of insurance and financial services companies throughout the United States, has announced that it is testing a blockchain solution aimed at accelerating the subrogation process for auto claims.
Subrogation is usually the last part of an insurance claims process where one insurance company recovers claim costs it paid to its customer for damages from the at-fault party.
Mike Fields, innovation executive, State Farm, said that existing processes are relatively manual and time-consuming, requiring physical checks to be mailed on a claim-by-claim basis between insurers.
In its press release, State Farm said that it is testing the blockchain solution to determine if it can be a viable product for insurance industry adoption and bring value to customers. It is working with another insurer to explore how an enterprise blockchain solution can help speed up subrogation process by securely and automatically compiling all subrogation payment amounts, netting the balance and facilitating a single payment on a regular basis between insurers.
“The blockchain solution we are working on has many potential benefits,” Fields said. “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.”
