DIGITALIZED TAKĀFUL CLAIMS PROCESSING

Hazik Mohamed

Chapter 5 in Beyond Fintech:Technology Applications for the Islamic Economy, 2020, pp 89-103 from World Scientific Publishing Co. Pte. Ltd.

Abstract: The takāful and insurance industry is an evolving process of safeguarding the assets of people from loss and uncertainty. It may be described as a social device to reduce or eliminate risk of loss to life and property. Insurance offers financial protection to both individuals and business, in the risks of a loss and as such, plays an essential role in mitigating risks through risk-sharing in uncertain but potentially injurious episodes. The risk landscape is continually evolving, and in order to keep up, the insurance industry needs to trace and provide customized insurance policies that can serve specific indemnity needs of the new economy. The insurers have to possess full understanding of every risk covered in their policies and when disaster hits, compensation and claims will be done in a timely and judicious manner.Latest developments in FinTech promises more efficiency and reduced costs causing significant shifts in the financial landscape, and the impending disruption in the insurance industry is inevitable. Blockchain today is something like where the Internet was in the 1990s — on the strategic interest of forward-looking companies, but still a while from extensive implementation. Therefore, the question for most insurance companies is not whether they will adopt blockchain, but rather, what to start with and how to test and prove the value proposition.In this chapter, we provide a strategic discourse on how blockchain can provide additional value to the insurance and takāful industries, understand the change in processes, issues that need to be overcome, and efficiency benefits, projected cost-saving, and risk management.

Keywords: Ethics and Technology; Digital Transformation; Regional Development; Customer Behaviour; Evolution of FinTech; Global Landscape; Payments; Asset under Management; InsurTech; Investments; Cloud Computing; Big Data Analytics; Blockchain; Internet of Things (IoT); Robo Advisors; Artificial Intelligence; Machine Learning; Islamic Finance; Endowment; Intellectual Property; Fraud Detection; Risk Mitigation; Cost-Effective; Increased Productivity; Immutable; Know Your Client (KYC); Media Rights; Coordination; Efficiency; Consensus-building; Agility; Scalability; Innovation; Cybersecurity; Collaboration; Venture Capital; Enterprise Solutions; Era of Digitization; Digital Ecosystem; Disruptive Models; Market Insights; Predictive Analytics; Insurance; Takaful; Capital Markets; Distributed Ledgers (DLT); Wealth Management; Islamic Markets; Sharing Economy; Trust Mechanism; Open Platforms; Web and Mobile; Cloud Computing; Trades and Settlements; Regulatory Controls; User Defined; Institutional Economics; Cryptocurrency (Tokens); Public Registries; Smart Contracts; Securities Clearing; Automation; Enforceability; Claims Processing (search for similar items in EconPapers)
JEL-codes: G1 G11 G2 O3 O32 (search for similar items in EconPapers)
Date: 2020
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