Legal & General Group plc has launched “estua-re,” which it characterized in a statement as “the first pension risk transfer execution platform driven by blockchain technology.”
Legal & General said that estua-re “is a transformative pillar” of Legal & General's global pension risk transfer (“PRT”) reinsurance strategy as it aims to achieve its strategy of global leadership in annuities.
According to the company, it is 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.” Legal & General claimed that it will “replace multiple processes and systems traditionally used to support each function, with the added security of blockchain technology.”
Legal & General said that estua-re enables it 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 is reinsured.
Legal & General said that its reinsurance clients “will be gradually moved to support provided on this platform.”
Legal & General added that it developed estua-re using Amazon Web Services (“AWS”), which provides Amazon Managed Blockchain. That allowed Legal & General “to quickly set up and easily manage [its] Hyperledger Fabric blockchain network.”
The company explained that with Amazon Managed Blockchain, “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, making the process much more efficient.”
Thomas Olunloyo, the chief executive officer of Legal & General's reinsurance operations, said, “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. 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.”
Rahul Pathak, the general manager of Amazon Managed Blockchain at AWS, added, “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. 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.”
Victoria Spears
Victoria Prussen Spears is senior vice president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. A graduate of Sarah Lawrence College and Brooklyn Law School, Ms. Spears was an attorney at a leading New York City law firm before joining Meyerowitz Communications. She may be contacted at [email protected].