Families may place obituaries in local newspapers to activate searches and verify if their loved one has a policy
MetLife, one of the world’s leading insurance providers, located in New York, is using Ethereum to transform the life insurance industry and improve the claims process. LumenLab, the MetLife subsidiary based in Singapore, is working with the NTUC Income insurance cooperative to launch “Lifechain”, a smart contract platform based on Ethereum to help streamline processes, according to Steven Ehrlich, a Forbes partner.
Zia Zaman, CEO of LumenLab, commented: “The future of Distributed Ledger Technology in life insurance will depend, in a way, on the participation of the public sector. Those jurisdictions and governments that are more innovative will see insured citizens and their jurisdictions benefit from less friction, more fulfilled payments and an improved experience in general”.
After the loss of a loved one, some family members may not know that the person was insured. This is where blockchain technology comes into automate life insurance claims.
The collaboration between Singapore Press Holdings and NTUC Income will help families, who place obituaries in a local newspaper, instantly activate searches to see if their loved one has a life insurance policy.
The technology works by sending the deceased’s national registration identity card to the platform called Lifechain. The information is sent as hash data, once the consent of the family has been obtained.
As part of the second step, families are notified when a policy is found, and a notification is automatically sent to the insurer so that the claims process can begin. In this way, it would not be necessary to wait for the families to conduct the initial process.
Julian Tan, Chief of Digital Business at Singapore Press Holdings (SPH), said: “SPH hopes to expand Lifechain to include more insurers so we can provide more comfort to family members, so they can take be in charge of the administrative affairs of the deceased in a safely way”.
Insurance companies are increasingly resort to blockchain technology, due to the benefits it offers, such as the ability to store information unalterably and safely, as well as assigning a kind of code different to each operation, which can be verified in the future without major inconveniences.
Insurers Adopt Blockchain
Recently, the technology firm BlockClaim received USD 627,000 in funds for a platform that uses blockchain to automate insurance claims.
In addition, the British insurance agency Legal & General recently announced that it has partnered with Amazon to create a blockchain system, with the aim to manage pension agreements.
According to some analysis of Markets and Markets, the use of blockchain technology will move almost USD 1,394 million in the insurance sector by the year 2023. This figure would imply an annual growth rate of 84.9% from 2018, when the figure was 65 million dollars. According to the institution, the increase in profits will be due to these companies, which need to have transparent and reliable systems for their users.
Blockchain continues achieving more fields. Thanks to these technologies, insurers will be able to know the identity of the clients that conduct the transactions, as well as the date and time of the issuance of the policy. In this way, distributed Ledger Technology could help reduce the fraud rate and allow an easy management of the platform, towards automatized and safe procedures in everyday life.
By María Rodríguez