In continuation with this series of posts on this topic, today I would like to share some features of a decentralized insurance platform and its impact on the whole industry. A decentralized insurance system is always cost-effective. The reason is very simple there are no middlemen involved in the system. So there will be no charge for themselves like profit. In this way, it will be a cost-effective and efficient mechanism for maintaining insurance. Thus cost efficiency is another significant advantage of it. The automation of claims processing through smart contracts reduces the time and resources required to handle claims, further lowering operational expenses. Accessibility is also improved in decentralized insurance models. Traditional insurance often excludes individuals in developing regions due to high costs or lack of infrastructure. Decentralized platforms can offer microinsurance products tailored to the needs of these populations. With these features, insurance can be more inclusive and accessible to the world's people.
![blockchain-7856212_1280.jpg](https://cdn.steemitimages.com/DQmcQD86YMCgCL4YoeNYc2CNRcTJ7hcjdA9hSVAfpvRN4ne/blockchain-7856212_1280.jpg) [source](https://pixabay.com/illustrations/blockchain-data-system-7856212/)
As there are some technical differences between traditional insurance and decentralized insurance, the adoption of decentralized insurance platforms could lead to substantial changes in the insurance industry. Traditional insurers may need to adapt by integrating blockchain technology into their operations or forming partnerships with decentralized platforms. This shift could drive innovation and competition. In this competition, the ultimate customers will be benefited as they will get better products at lower prices. This system will create new insurance products. Like parametric insurance, which pays out based on predefined triggers rather than actual losses. The system can be easily run or implemented with smart contracts. It will obviously ensure faster payment and assessment of the disputes of claims.
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