To date, the vast majority of blockchain insurance applications have focused on Property & Casualty (P&C) insurance. In September 2017 The Institutes RiskStream Collaboration (previously called RiskBlock) agreed to explore blockchain with LIMRA, the professional body for the Life and Annuities sector. After running labs to select the initial use cases, a year later they settled on Mortality Monitor which will automatically notify beneficiaries on the death of a policyholder. Last week RiskStream announced that eight insurers have signed up for the first initiative.
The insurers are American Family Life, American Fidelity, Horace Mann Educators, John Hancock, Nationwide, Prudential Financial, Securian Financial and USAA. Four of the members are also in RiskStream’s P&C group. Simultaneously RiskStream announced that seven additional members have joined the P&C group bringing the insurer count to 39.
Some time ago, the USA Today found that certain insurers used the Social Security Death Master File to stop paying out annuity owners. But they weren’t using the same data for life insurance. Hence they held on to death benefit money longer or didn’t pay out at all. Some beneficiaries either are unaware that the policyholder is insured or they don’t know which insurer provided cover. Currently, 20 U.S. states have legislation addressing the issue.
“Using blockchain technology, we will enable companies to not only meet the state regulatory requirements but better serve their customers, identify and prevent fraud, and have proof that the appropriate proceeds have reached intended recipients,” said Christopher McDaniel, President of RiskStream.
Other blockchain initiatives in Life and Annuities include an Indian consortium with EY, service provider Cognizant and the major insurers. And in Singapore, FidentiaX is a startup that’s creating a blockchain powered marketplace for the resale of life insurance policies.