(Image credit: NASA.)
Legal & General Group (London) has announced the launch of ‘estua-re,’ which the company says is the first pension risk transfer (PRT) execution platform driven by blockchain technology.
Legal & General reports that ‘estua-re’ is a pillar of its global PRT reinsurance strategy as the Group aims to achieve global leadership in annuities. The company characterizes estua-re as a single ecosystem capable of driving every stage of the PRT reinsurance value chain including pricing, claims handling, financial reporting and collateral, utilizing data dynamically stored on the blockchain. The solution will replace multiple processes and systems traditionally used to support each function, with the added security of blockchain technology.
‘estua-re’ enables the Group to provide excellent service to customers in multiple markets, efficiently and at lower long term costs, redefining the way long term life reinsurance business is sold and managed, with these benefits flowing to the individual pensioners whose long term financial security we guarantee via reinsurance, according to Legal & General Reinsurance. The company’s clients will be gradually moved to support provided on the new platform.
Legal & General Reinsurance’s team developed ‘estua-re’ using Amazon Web Services (AWS, Seattle), which the company says was chosen due to the vendor’s innovative products and services for blockchain technology.
Amazon Web Services provides Amazon Managed Blockchain, which Legal & General says allowed it to quickly set up and easily manage its Hyperledger Fabric blockchain network. Amazon Managed Blockchain is designed such that multiple parties can transact with each other without needing an intermediary. All members maintain a copy of the ledger database, providing greater transparency. Also, manual reconciliation can be replaced with smart contracts, adding significant efficiency.
“‘estua-re’ is the result of market leading innovation led by the L&G Re team and an exciting milestone in the deployment of blockchain in the long term reinsurance space,” comments Thomas Olunloyo, CEO, Legal & General Reinsurance. “Using AWS we have been able to create a solution that addresses not only the greater speeds at which risks are transacted but also drives transparency and security in an increasingly interconnected market.
Blockchain Uniquely Suited to Annuities
“We believe that blockchain is uniquely suited to the long-term nature of annuities business as it allows data and transactions to be signed, recorded and maintained in a permanent and secure nature over the lifetime of these contracts, which can span over 50 years,” Olunloyo adds.
“It’s exciting to see how customers like Legal & General Reinsurance are using Amazon Managed Blockchain to create innovative products that allow multiple parties to work together in a trusted way, enabling them to simplify and speed up their systems and processes,” comments Rahul Pathak, General Manager, Amazon Managed Blockchain, AWS. “With Amazon Managed Blockchain, Legal & General Reinsurance can focus on building new business applications that enrich the experience for their customers and transform their business instead of dealing with the challenges of keeping a blockchain network up and running, all while taking advantage of the security and scalability the service offers.”