Algorand, a blockchain firm focused on decentralized finance, said it is working with an image tampering detection firm to help insurance companies detect when fraudulent claims are made.
Insurance fraud is a big problem in the U.S.—costing an estimated $40 billion a year according to the FBI. Difficult-to-detect Deepfakes photos and videos could make it even bigger, insurers fear.
Algorand said its open-source, permissionless, proof-of-stake protocol is going to be used to deliver “digital transformation across the insurance industry”—a very well-timed modernization considering that claims related to the coronavirus are going through the roof now.
Plenty of insurance companies have been experimenting with blockchain for issues like providing proof of insurance, sharing information about health care providers with competitors, and even using smart contracts to automatically pay collision damage claims.
Now, tamperproof validation platform Attestiv plans to build new tools on Algorand’s public blockchain, the platform said in a statement on May 20.
I’ll tell you no lies
Attestiv’s core technology enables digital media such as photos, videos and documents to be validated using artificial intelligence, either at the point of capture or through forensic analysis.
To ensure that these files cannot be meddled with, a “fingerprinting” process is used to create a unique representation of these digital media assets—preventing changes and alterations being made covertly. Those “fingerprints” will be stored on the Algorand blockchain.
In practice, this could mean that claimants will be required to take photos, videos, and make copies of documents to support their claim through an app issued by an insurance company. These images would include metadata and time-stamps helping to verify the legitimacy of this evidence.
With the proliferation of deepfakes as the technology and skill needed to create fake images and video so good that the human eye can’t detect them gets easier to acquire, Attestiv believes its approach can stop “tampered media” from entering the systems of an insurer in the first place.
Attestiv has initially set its sights on the property and casualty part of the insurance market. Whereas car and home insurance are often sold separately, P&C policies often bundle them together.
Insurance fraud is a significant issue. When healthcare policies are removed from the equation, the FBI estimates that these illicit claims cost insurers $40 billion a year. A 2016 McKinsey report on blockchain in the insurance industry said between five and 10 percent of all claims are fraudulent. It isn’t a victimless crime either, as the average American family ends up paying an extra $400 to $700 a year in premiums.
D is for disruption
Attestiv was founded in 2018, and its technology is being used to provide services across insurance, news media, financial services, and public safety.
According to the company, Algorand’s privacy and security measures mean regulated businesses receive the required levels of compliance. Attestiv added that Algorand offers “a competitive cost structure that can grow and scale within the company.”
Attestiv CEO Nicos Vekiarides said his company is “excited about our new offering and have selected Algorand because of the enterprise-level scalability, security, and economics that meet our customer needs.
“For us, being able to build our next-generation of insurance offerings on a robust, public blockchain platform that is easy to use and offers an extensive set of features for future enhancements is a huge plus,” he added.
Algorand pushes forward
Together, both companies are hoping to unlock new levels of automation and customer satisfaction—delivering a single system “removing unnecessary redundancies and reducing the risk of fraud.” They add that further efficiencies could follow through the addition of smart contracts.
The new partnership comes as the Algorand Foundation continues with efforts to boost its blockchain. Last month, it unveiled a new grants program worth $50 million as part of a multi-year initiative designed “to provide funding to projects building apps to support infrastructure, end-user application, and research innovation on its blockchain.”
A new developers’ portal has also been launched that features tutorials on how to use the blockchain platform, alongside use-case solutions and code samples.
Back in January, Algorand teamed up with French startup PlanetWatch to put global air quality tests on the blockchain. Algorand’s proof-of-stake consensus algorithm, which is far less energy intensive than the proof-of-work approach used by the likes of Bitcoin, was said to be a crucial factor in PlanetWatch’s decision.