State Farm® Exploring How Blockchain Technology Can Benefit Customers
Blockchain. Decentralized technology. Distributed ledgers. It can seem overwhelming when you read or hear these terms, especially when it comes to sharing information.
State Farm is no stranger to the innovative technologies transforming the insurance industry. Whether it’s our response to extreme weather events or research related to automated vehicle technology, we are committed to innovation that can enhance the customer experience.
- Blockchain is an underlying technology used to manage transactions and store information.
- State Farm is actively involved and monitoring the evolution of this technology.
- With its unique features, blockchain has the potential to affect and transform many industries, from banking and insurance to government and healthcare.
So what is blockchain?
You've likely heard the term blockchain in relation to Bitcoin and other cryptocurrencies but, it is important to understand the distinction between the two. Blockchain isn’t a vendor or the name of a software. It’s the underlying technology used to manage transactions and store information using cryptography (i.e., mathematical algorithms and secret keys that encrypt data), peer-to-peer networking and data storage.
Blockchain has been recognized for its possible uses outside of digital currency because of the innovative way it facilitates transactions between multiple parties. Blockchain groups transactions into “blocks” which are linked together in a “chain” to preserve the integrity in which the transactions occurred.
Right now, when companies make transactions, sometimes a third party or middleman is involved. That third party confirms all the transactions and tracks the data – often times charging a fee for this service. By using a third party, State Farm is placing trust in people to make sure it is done right and increasing the chance of mistakes or delays due to human error.
With blockchain, that third party may be removed. By storing blocks of information that are identical across its network, the blockchain isn’t controlled by a single entity and has no single point of failure. It is more reliable – producing more trust in the transaction and the data. It has the potential to help drive efficiency in our current products and innovation.
State Farm is actively involved and monitoring the evolution of this technology across the insurance industry. We are also joining consortiums like our membership in RiskBlock. Blockchain is just one more way that we can meet customer needs in ways they wouldn’t expect from their insurance company today.
The mission of State Farm is to help people manage the risks of everyday life, recover from the unexpected, and realize their dreams. State Farm and its affiliates are the largest providers of auto and home insurance in the United States. Its 19,200 agents and 59,000 employees serve approximately 84 million policies and accounts – over 81 million auto, fire, life, health and commercial policies and over 2 million bank and investment planning services accounts. Commercial auto insurance, along with coverage for renters, business owners, boats and motorcycles, is available. State Farm Mutual Automobile Insurance Company is the parent of the State Farm family of companies. State Farm is ranked No. 36 on the 2020 Fortune 500 list of largest companies. For more information, please visit http://www.statefarm.com.