Last week blockchain startup Infineo announced it had tokenized $125 million in life insurance policies in just over three months since launch. These are not new policies. They are policies that the insured has uploaded to its platform to tokenize. The current purpose is to ensure the beneficiaries are notified if the policy holder dies. However, Infineo also plans to create a secondary marketplace for policies and support lending using insurance policies as collateral.
When someone dies, the beneficiaries aren’t always aware they were included in the policy. In the past there have been issues with life insurers not making sufficient effort to contact beneficiaries. A USA Today report in 2016 alleged that insurers used the Social Security Death Master File to stop payments to annuity owners. However, they allegedly were not using the same data to notify life insurance beneficiaries. The same year, major life insurance companies agreed to pay $7.4 billion in unclaimed benefits to the Florida Office of Insurance Regulation. Two thirds of the sum was passed to beneficiaries and the rest as unclaimed property in various states.
With Infineo, policy holders upload their insurance cover document and then add contact details of beneficiaries. A hash or fingerprint of the policy is logged on the public Provenance blockchain. However, personal information is held in an external encrypted database. The data isn’t currently linked to the insurers, so any policy changes still involve contacting the insurer.
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