DESIGN OF A BLOCKCHAIN-ENABLED SMART INSURANCE SYSTEM

Abstract

The insurance industry continues to face challenges related to transparency, trust deficits, operational inefficiencies, and delayed claim settlements due to its dependence on centralized and manually driven systems. With increasing digitalization and rising customer expectations for faster and more reliable services, there is a growing need for secure, automated, and transparent insurance solutions. Blockchain technology, characterized by decentralization, immutability, and cryptographic security, has emerged as a promising innovation capable of addressing these challenges. This study aims to design and analyze a blockchain-enabled smart insurance system that enhances efficiency, security, and transparency in insurance operations. Using a descriptive and conceptual research approach based on secondary data from academic literature, industry reports, and official sources, the study examines the role of blockchain and smart contracts in automating policy management, premium payments, and claims settlement. The findings suggest that blockchain-based smart insurance systems can significantly reduce fraud, improve data integrity, lower administrative costs, and enhance trust among stakeholders. Despite challenges related to implementation cost, scalability, and regulatory uncertainty, the study concludes that blockchain-enabled smart insurance systems have strong potential to transform traditional insurance models and improve service delivery in the digital era.