L&G launches blockchain-based pension insurance platform [updated]
UK insurance giant Legal & General (L&G) has teamed up with Amazon to develop a blockchain-based pension risk transfer process.
L&G – one of the leading providers of bulk annuities in the UK – announced yesterday it had launched a new platform, dubbed Estua-re, aimed at covering every stage of insuring and reinsuring a pension fund.
Estua-re “will replace multiple processes and systems traditionally used to support each function, with the added security of blockchain technology”, the company said in a statement.
L&G Reinsurance will “gradually” transfer its existing clients’ data onto the new system, it said.
The company developed Estua-re using Amazon Web Services (AWS), the cloud computing arm of internet services giant Amazon. L&G said AWS’ blockchain capability would allow all parties involved in a bulk pension transfer deal to deal with each other without intermediaries.
Thomas Olunloyo, CEO of L&G Reinsurance, said: “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.
“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.”
L&G’s pension insurance arm has backed a number of transactions so far this year, collectively worth more than £5.4bn (€6.1bn). These included last week’s record £4.6bn buyout of the Rolls-Royce pension scheme, and a £500m buy-in deal with educational publishing company Pearson, completed in February.
This article was updated on 14 June to amend the fourth paragraph, which previously incorrectly stated that client assets were to transfer to the platform. Estua-re will take on client data only.