Yesterday, The Institutes RiskStream Collaborative announced a blockchain proof of concept for a decentralized death registry service it calls Mortality Monitor. The initial participants are Nationwide, Prudential Financial, and Securian Financial.
To date, the bulk of RiskStream’s blockchain work with its 40 members has been in property and casualty insurance. But more than two years ago, it set up a dedicated life and annuities group in collaboration with industry body LIMRA and at that point selected this use case.
With the prevalence of the pandemic, the timing seems appropriate. “Timely closure of life insurance and annuity claims has never been more important and remains an ongoing challenge, as verification and validation of death claims requires carriers to have comprehensive decedent information, but no one source has emerged to fill this need,” said Christopher McDaniel, President of the RiskStream Collaborative. “The Mortality Monitor solution makes inefficient manual processes obsolete by sharing decedent information securely, in real-time, and with transparency and traceability.”
Historically, the U.S. life insurance sector has a bad reputation in this regard. A 2016 USA Today report alleged that some insurers use the Social Security Death Master File to stop paying out annuity owners but didn’t use it to notify the beneficiaries of life insurance.
That year major life insurance companies agreed to pay $7.4 billion in unclaimed benefits. $5 billion was to go directly to beneficiaries and the balance as unclaimed property to the states. That said, the figures are a tiny proportion of the $600 billion in claims paid out over the prior ten years.
“The Mortality Monitor proof-of-concept shortens the response time from date of death to notification of beneficiary, thus improving the beneficiary’s experience while reducing time, cost, and risk to the insurer,” said Eric Henderson, President of Nationwide Annuity.
Meanwhile, on the property and casualty side, Riskstream has been readying its first application for production, the First Notice of Loss solution for auto accidents. After extensive member testing last year and production load testing at the start of this year, the solution has not yet been launched.
RiskStream hasn’t announced any additional funding since it started in 2017. We’d hazard a guess that when the investment topic is resolved, the move to production could follow shortly afterward.