Decentralized Insurance Subrogation Using Blockchain
Oindrila Bhadra, Swagatika Sahoo, Chandra Mohan Kumar, Raju Halder · 2022
Subrogation in insurance is the legal right that an insurance company holds to recover the amount paid to the insured from the at-fault party. As of now, subrogation is a relatively manual, laborious, and time-consuming process, requiring many physical checks and much communication between the insurance companies. Moreover, the involvement of multiple stakeholders in the process leads to a high administration cost and a long delay in processing the claims. This even increases when multiple claimants or third parties are involved. Although there are several blockchain-based proposals for general insurance, the topic of subrogation is still untouched. This paper introduces a novel blockchain-based solution to the subrogation process in the auto-insurance industry. We consider all existing stakeholders, including the insured, adjuster, lawyer, agency, and special investigation unit (SIU), and we design smart contracts aimed at making the subrogation process more efficient, transparent, and secure. The use of blockchain saves a lot of unnecessary expenditure, time, and manual labor, facilitating easy data-sharing while reducing the possibility of human errors. Moreover, the absence of centralized authority eliminates any fraudulent activities and thus increases trust in the system. To the best of our knowledge, this proposal is the first of its kind using blockchain technology. It will cover a broader perspective of insurance subrogation, bringing all associated stakeholders under the same platform.