Collaborating for a Better Blockchain

Blockchain, a distributed ledger technology that offers a secure, incorruptible record of transactions on a decentralized network, is showing extraordinary promise as a means to boost transactional transparency and operational efficiencies across the life insurance and annuities space. The technology has the potential to help insurers lower costs, explore new markets and, more importantly, provide an engaging and integrated service to the end customer. But the insurance industry will realize the biggest benefits only if all industry organizations work together for the greater good. Currently, there are three large groups in the insurance space working together with peers to look at the blockchain technology to determine how carriers can use blockchain to benefit the industry as a whole. First, P&C carriers and institutes are helping lead the charge. These groups have been working on industry-wide use cases for the P&C industry for nearly two years. Second, B3i, which was initially set up by reinsurance firms primarily based out of Europe, is now expanding globally. And finally, led by LIMRA, life and annuities insurers are coming together as an industry to explore ways to leverage blockchain. LIMRA’s recently established Blockchain Advisory Council is working as one entity to develop collaborative industry solutions. See also: How Will Blockchain Disrupt Insurance?   While carriers can leverage blockchain and other technologies like digital; big data and analytics for growth; improved customer experience; and competitive differentiation, the power and promise of blockchain can only be realized if carriers collaborate and work together as a group — and keep the end customer in mind. This collaborative model will benefit all insurers and ensure that every firm in the blockchain network gets the same information at the same time. In one use case example, carriers can use blockchain to access the data typically available from the Death Master File to provide prompt services to the policyholder as soon as they receive updated information on a death. Having timely updates on a death will enable the carrier to provide the best service at the most critical phase of a policy holder’s or beneficiary’s lifecycle. Every organization can then rely on an information flow that’s consistent throughout the industry, and carriers can then differentiate and develop a competitive edge based on how they handle the information and respond to death claims. However, the collaboration ensures that every organization gets the information at the same time so that they can appropriately meet their customers’ needs. With smart contracts, contract settlements between a carrier and a reinsurer could be made easier and faster than ever before, because all data will be available in the blockchain as a smart contract. Another use case could be agent/agency fraud identification and sharing. See also: Blockchain: What’s the Real Story?   Blockchain may be an enabling technology for several different improvements within the life and annuity industry. For instance, in the near future (we hope), the industry will have the ability to automate the underwriting of more complex life policies and better serve life insurance customers because electronic medical records will be available through the blockchain. The time from application to complex policy issuance will be minimal, delivering a “no touch” experience for the customers. Blockchain technology is here and is already being implemented collaboratively in the P&C sector. The life and annuities industry is looking to leverage the experience from the other insurance sectors and the financial services sector to jumpstart our own journey. These are just a few use cases, but there are many other possibilities, which expand as we look to a more integrated but decentralized blockchain world.