BLOCKCHAIN AND DISTRIBUTED LEDGER TECHNOLOGY IN MODERNIZING INSURANCE SYSTEMS: ENHANCING TRANSPARENCY AND REDUCING FRAUD

Abstract

This article examines the transformative impact of blockchain and Distributed Ledger Technology (DLT) on the insurance industry, analyzing their potential to address longstanding challenges in transparency, efficiency, and fraud prevention. Drawing from extensive industry research and market analysis, we explore how these technologies revolutionize core insurance processes, from policy administration to claims processing. The article reveals significant improvements, including a 25-30% reduction in claims expenses, a 40-70% decrease in processing times, and potential industry-wide cost savings of $5-10 billion through automated verification. Our analysis encompasses technical implementation challenges, regulatory considerations, and future perspectives, demonstrating how blockchain-enabled smart contracts, automated underwriting, and real-time risk assessment reshape traditional insurance models while enhancing customer experience and operational efficiency.