/biz/ - Business & Finance

>>17792792
>https://blog.chain.link/how-smart-contracts-can-decrease-information-asymmetry-build-trust-and-revolutionize-the-insurance-industry/

Information asymmetry causes imbalances in the pricing and value of insurance policies. While many policyholders are honest, insurance companies need to account for bad actors by raising the baseline costs on all premiums in order to reliably turn a profit. It makes underwriting policies and processing claims more time consuming, costly, and complicated for everyone. Higher premiums and longer processing times further erode trust between insurers and insurees, and increase the incentive for policyholders to commit fraud. It’s an unhealthy cycle of mutual distrust that could be alleviated by technological intervention.