Insurance companies and banks have been showing great interest in Distributed Ledger Technology (DLT) for quite some time. Much is to be read about the high potential of cryptographic encryption and immutable stored data. The British financial company Legal & General in the area of occupational pensions now presented a concrete application case. It uses a blockchain system from Amazon Web Services. This is the result of a June 12 report from Reuters .
With Amazon Managed Blockchain, Amazon provides a service for building and managing scalable blockchain networks using the open-source Hyperledger Fabric and Ethereum frameworks. The AWS blockchain templates allow customers to create and deploy their own blockchain networks.
Blockchain: security for insurers
Legal & General is one of the UK’s largest investment managers for occupational pension schemes. As a specialist reinsurer in this area, L & G assumes the risk of pension deficits for large companies. L & G announced the use of a blockchain system for this so-called pension risk transfer (PRT):
We believe that the DLT is an ideal technology for PRT companies because the various parties can exchange data with each other. You can digitally and cryptographically sign the data and track it over any period of time. Finally, they are stored in successive blocks in the blockchain.
The insurance company developed and tested the platform over a period of 18 months. According to own statements the feedback from customer side are very positive. Above all, this would be due to the simplicity and clarity of the underlying smart contract and its verifiability over any period of time.
L & G currently plans to use blockchain technology for occupational pensions only outside of its UK and US core markets. However, a spokesman for L & G said that the platform could be extended to these two markets in the future.