Blockchain technology keeps getting accolades for its life-changing patterns and measures it offers to individuals and business owners alike to carry out their day-to-day activities. The recent medal added to its collection is the Fitch’s rating. Fitch is one of the ‘big three’ credit rating agencies and has certified Blockchain as a “game-changing technology.”
The rating which was released in New York/Chicago on April 25 this year sees Blockchain as a technology that has come to stay and help improve the way things are done in any industry.
Fitch most importantly thinks that the Blockchain technology will be far more useful in the insurance industry. According to a report published, Fitch believes that “Insurance is a fertile ground for blockchain capabilities.”
Per the ratings, some of the benefits of using Blockchain technology include; reduced operating costs, more accurate customer-specific data, better risk pricing, and improved efficiencies.
Although there was a press release posted alongside the report that wasn’t made public yet at the time of this report which revealed that the company also sees blockchain as a tool that can be used to streamline the transactions carried out by companies while reducing fraud at the same time.
According to a statement made by Fitch, the firm reiterated that;
“Efficiencies and cost reductions could be achieved by reducing the need for reconciliation and audits, automating certain processes and improving access to data. Estimates of the potential savings for the global (re)insurance industry from Pricewaterhouse Coopers and B3i, an insurance industry trade group are focusing on blockchain, range from 15 percent to 30 percent of current annual expenses.”
Although, the benefits mentioned above are seen as benefits that would manifest in the long-term use of it say like five years with minimal short-term implications. As credit ratings of firms might not really be affected by the tech before that time, explained Fitch.
Even with all the praises and advantages of this technology mentioned, Fitch also made it clear that the uncertainty of the full acceptance of Blockchain adoption lurks in the corner.
He also talked about whether the interest would certainly match the investment from using a platform that is built around the tech.
“There are numerous legal, regulatory and security issues that need to be addressed to facilitate the wide-scale adoption,” Fitch wrote adding that “The Ultimate viability of the technology will depend on a select group of industry leaders adopting blockchain to gain competitive advantages.”
