The insurer is using the live tech to enhance efficiency and transparency throughout the claims process.
MetLife is adopting the use of Ethereum blockchain in a move that will disrupt the $2.7 trillion life insurance industry. Among the goals is to help beneficiaries to know they are entitled to a payout when their family member or friend has died.
At the moment, the industry is essentially opaque to both policyholders and beneficiaries.
This situation is advantageous to neither the life insurance industry nor its customers. MetLife is hoping to change that through the use of blockchain’s efficiency and transparency. It intends to apply this tech to the claims process.
This is believed to be the first pilot program of its kind in the life insurance industry. To run the pilot program, LumenLab, the insurance company’s incubator in Singapore, has partnered up with NTUC Income (Income) and Singapore Press Holdings. They are collaborating on a smart contracts platform called “Lifechain.” The purpose is to make it possible for loved ones of a deceased person to quickly and easily determine if they are the beneficiaries of a life insurance policy. From there, they can automatically file a claim.
If the blockchain pilot is successful, it could change the way the entire life insurance industry functions.
A successful completion of the pilot program will create entirely new products and markets. It will also open up the capacity to serve a broader diversity of customers at reduced price points.
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At the moment, it can be exceptionally difficult for someone to find out if their departed loved one had a life insurance policy, with whom, and if they are the beneficiary. On the main, the current system depends on beneficiaries knowing of the existence of a life insurance policy, the insurer that sold it and that they are entitled to make a claim upon the death of the policyholder.
This has meant that thousands upon thousands of policies are left unclaimed every year. As time passes, the search becomes more difficult for insurers to locate beneficiaries. It also becomes less likely that a beneficiary will discover that they are entitled to make a claim.
MetLife Asia CIO and LumenLab CEO Zia Zaman said: “We think there are benefits from a security point of view,” as the top benefit of blockchain technology for the life insurance industry. Zaman also pointed out that this technology offers the opportunity to experiment and learn, which is not possible while using a traditional database. Moreover, blockchain based systems make it possible for multiparty participation.