The key to getting value out of blockchain is to identify key business areas where multiple records are being kept of the same transaction and using it in those areas to eliminate the potential for discrepancies and to increase the overall speed.
It is my belief that blockchain will ultimately transform the life and pension sector but initially the gains will be relatively low. Most life and pension companies have multiple legacy systems, which they struggle to keep in sync. The use of blockchain to provide a single record of transactions accessible by multiple internal systems could remove discrepancies between those systems and improve accuracy. Similarly, the sharing of ledgers between trusted participants could speed up transactions between multiple parties to transactions, e.g. where there are reassurers involved in the contract.
It is only later, when there is far wider adoption of blockchain that the true value will be training in the adoption. For instance when health-care providers start storing medical records directly on a blockchain, one can foresee scenarios where applicants for protection give underwriters permission to directly access those records, allowing them to assess risk with far greater accuracy and at much higher speed than the current process. Or when national insurance payments are blockchained, working out a client’s state pension entitlement will be simple for financial advisers and lead to better long-term financial planning for those clients.
But these scenarios lie comfortably in the future. For the present, life and pension providers are better off ignoring the extreme hype and seeing blockchain technology solutions as a good step forward in introducing internal efficiencies or efficiencies in their interactions with trusted stakeholders. This will position them well to benefit as more and more companies and government agencies adopt blockchain, whether on private blockchains or in the purist distributed version. But ignoring blockchain is dangerous. It’s so useful, it is definitely here to stay.