UK Insurer Legal & General Picks Amazon for Blockchain Pensions

Reuters reports that UK insurance firm Legal & General has settled on Amazon as its client to work on what it says will be the first corporate pension blockchain system.

Amazon Web Services (AWS) will launch a managed blockchain system by Legal & General to manage bulk annuities. This involves the insurer assuming the control of the defined benefit or final salary pension schemes from their clients.

Legal & General Reinsurance CEO Thomas Olunloyo explained why they chose blockchain technology in their pension solutions:

“[blockchain suits] 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.”

He references how blockchain uses a shared database to securely process and settle transactions without needing an intermediary to verify the transactions. While banks and other financial institutions have already been investing a lot of resources into researching blockchain-based applications, fintechs and insurance techs (or insurtechs as they are known) have been considering it to further cut costs and enhance the simplicity of back- and mid-office processes.

For now, Legal & General will only apply the platform for bulk annuity clients outside of its chief focus within United Kingdom and the US, although sources have said that these two markets could also benefit in the future.

AWS GM for Amazon Managed Blockchain at AWS Rahul Pathak described the deal as allowing the insurer to “focus on building new business… instead of dealing with the challenges of keeping a blockchain network up and running”.

Amazon’s managed blockchain services only went live early last month, as reported by Bitcoin News.

 

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