{"id":34889,"date":"2019-10-30T10:17:21","date_gmt":"2019-10-30T10:17:21","guid":{"rendered":"https:\/\/www.intelligentcio.com\/eu\/?p=34889"},"modified":"2019-11-01T09:13:12","modified_gmt":"2019-11-01T09:13:12","slug":"uk-insurer-utilises-blockchain-for-business-efficiencies","status":"publish","type":"post","link":"https:\/\/www.intelligentcio.com\/eu\/2019\/10\/30\/uk-insurer-utilises-blockchain-for-business-efficiencies\/","title":{"rendered":"UK insurer utilises Blockchain for business efficiencies"},"content":{"rendered":"\n

Smart technologies are radically improving the way businesses operate and Blockchain is one such example that is creating efficiencies, particularly for the finance sector. Maarten Ectors, Chief Innovation Officer at Legal & General, tells us how its Blockchain system – created by DataArt and hosted by Amazon – has enhanced its operations by enabling secure processes and transactions without the need for a third-party.  <\/em><\/p>\n\n\n\n

Legal & General, one of the UK\u2019s\nleading financial services groups and a major global investor, has\nannounced the launch of \u2018estua-re\u2019, the first pension risk transfer execution\nplatform driven by Blockchain technology. <\/p>\n\n\n\n

\u2018estua-re\u2019 is a\ntransformative pillar of Legal & General\u2019s global Pension Risk Transfer\n(PRT) reinsurance strategy as the group aims to achieve its strategy of global\nleadership in annuities. It is a single ecosystem capable of driving every\nstage of the PRT reinsurance value chain including pricing, claims handling,\nfinancial reporting and collateral, utilising data dynamically stored on the Blockchain.\nIt will replace multiple processes and systems traditionally used to support\neach function, with the added security of Blockchain technology. <\/p>\n\n\n\n

\u2018estua-re\u2019 enables the group 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 guaranteed via reinsurance. Legal & General Reinsurance (Legal & General Re) clients will be gradually moved to support provided on this platform. <\/p>\n\n\n\n

The Legal & General Reinsurance team developed \u2018estua-re\u2019 using Amazon Web Services (AWS), chosen due to the tech giant\u2019s innovative products and services for Blockchain technology. <\/p>\n\n\n\n

Amazon Web Services provides\nAmazon Managed Blockchain, which allowed Legal & General to quickly set up\nand easily manage its Hyperledger Fabric Blockchain network. With Amazon\nManaged Blockchain, multiple parties can transact with each other without\nneeding an intermediary. All members maintain a copy of the ledger database,\nproviding greater transparency. Also, manual reconciliation can be replaced\nwith smart contracts, making the process much more efficient. <\/p>\n\n\n\n

Thomas Olunloyo, CEO of Legal\n& General Reinsurance, said: \u201c\u2018estua-re\u2019 is the result of market-leading\ninnovation led by the L&G Re team and an exciting milestone in the\ndeployment of Blockchain in the long-term reinsurance space. <\/p>\n\n\n\n

\u201cUsing AWS, we have\nbeen able to create a solution that addresses not only the greater speeds at\nwhich risks are transacted but also drives transparency and security in an\nincreasingly interconnected market. We\nbelieve that Blockchain is uniquely suited to the long-term nature of annuities\nbusiness as it allows data and transactions to be signed, recorded and\nmaintained in a permanent and secure nature over the lifetime of these\ncontracts, which can span over 50 years.\u201d <\/p>\n\n\n\n

Rahul Pathak, General\nManager, Amazon Managed Blockchain at AWS, said: \u201cIt\u2019s\nexciting to see how customers like Legal & General Reinsurance are using\nAmazon Managed Blockchain to create innovative products that allow multiple\nparties to work together in a trusted way, enabling them to simplify and\nspeed up their systems and processes. <\/p>\n\n\n\n

\u201cWith Amazon Managed Blockchain, Legal & General Reinsurance can focus on building new business applications that enrich the experience for its customers and transform its 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.\u201d<\/p>\n\n\n\n

Intelligent CIO Europe caught up with Maarten Ectors, Chief Innovation Officer at Legal & General, who talks us through the solution implementation and how it has improved operations for the insurance company.<\/em><\/p>\n\n\n\n

Can you give us an overview of the company and\nits core objectives?<\/strong><\/p>\n\n\n\n

Legal\n& General is an FTSE30 insurer and investment manager. It is a leading\nprovider of life insurance, pensions and is the largest institutional investor\nin the UK, with one trillion pounds under management.<\/p>\n\n\n\n

As Chief Innovation Officer of L&G, I run the Future Ventures team, a roving team that serves L&G businesses that have run out of ways to solve a problem – they\u2019ve tried all the obvious and not so obvious solutions and now they\u2019re stuck. They have, what I like to call, a \u2018Harry Potter problem\u2019 – this is an unsolved critical business problem for which you need an innovator’s wand.<\/p>\n\n\n\n

Our goal as a team is to solve these kinds of problems. Our core objective is to turn revenue-draining technology and processes into revenue-generating technology solutions. For example, our Blockchain project, ‘estua-re\u2019, for which we partnered with the technology consultancy company, DataArt, to build. DataArt came up with an idea that enabled a process to be completed in a matter of minutes which previously took an entire month. <\/p>\n\n\n\n

What was the reason behind selecting Amazon\nWeb Services?<\/strong><\/p>\n\n\n\n

In technology you can make two types of decisions \u2013 ones that\ncould get you fired and ones that could get you promoted. Smart people, and in\nour case a smart team, outsource the decisions that have the potential to get\nyou fired and carry out the work that can get you promoted. We don\u2019t waste time\non the non-core tasks such as cloud hosting that can be carried out more\nefficiently elsewhere. Amazon has the economies of scale.<\/p>\n\n\n\n

Selecting Amazon was an obvious decision as the company is a market leader and can handle the bulk. Outsourcing to Amazon allows us to continue solving problems and doing things that are core to the team. My non-financial services background also meant that I already had a strong relationship with Amazon and was confident that it could deliver.<\/p>\n\n\n\n

How has the solution allowed you to manage bulk risk\ntransfers?<\/strong><\/p>\n\n\n\n

Previously, every month, many tens of thousands of policies\nhad to be processed by people, determining monies paid in, monies paid out and who\nwas transferring what to who. Each had different parameters and terms. Then, at\nthe end of the month, the process would start again. If an error was made, this\ncaused mistrust because inevitably, the error is made in favour of the\nprovider. It was also extremely labour-intensive at both the client end and at\nthe end of the reinsurer. <\/p>\n\n\n\n

Using Blockchain technology, DataArt built a system whereby all the initial calculations and terms could be set at the beginning and subsequently, all calculations made would be carried out automatically while retaining transparency in the Blockchain. This is transformative to the L&G reinsurance business. The cost saving of labour at the client end means that L&G became an extremely attractive option and instead of being a cost drain like the old system was, it became a revenue-generating technology. <\/p>\n\n\n\n

What challenges have you faced in terms of\nmanaging regulation, reliability and cost?<\/strong><\/p>\n\n\n\n

The solution is compliant with all regulation and vastly\nimproves transparency. Costs have been hugely reduced for both L&G and its\nclients. <\/p>\n\n\n\n

How has the solution enabled the company to\nscale its operations?<\/strong><\/p>\n\n\n\n

The speed of transaction that the solution has enabled and its non-reliance on routine tasks carried out by people means that L&G Reinsurance can scale up at speed.<\/p>\n\n\n\n

Why do you trust that the solution is secure?<\/strong><\/p>\n\n\n\n

I take the approach that all software has bugs. You are aware that bugs will be brought in when you work with outside suppliers. Either this will come from them, they\u2019ve used a component from others, or they did something wrong. Despite whether you keep things 100% in-house, this will happen. The question is how you solve this reality and the answer is by completing the right testing. Automatic testing must be carried out not in the mindset that maybe<\/em> there\u2019s a bug, but rather that there is<\/em> a bug which must be found. We test continuously and take a Dev(Sec)Ops approach. <\/p>\n\n\n\n

Why has this approach reduced complexity\ncompared to what you were doing before?<\/strong><\/p>\n\n\n\n

The previous process for bulk pension risk transfer involved many thousands of policies. Both sides had their own spreadsheets, each with their own complex calculations with people checking the transactions. The problem wasn\u2019t just concerning the person-hours involved, but the inevitability of human error. By moving all the contracts into a Blockchain solution, according to mutually agreed calculations, the process was shifted from months to minutes. Any change in policies can be viewed by all, so the whole thing becomes entirely transparent and secure over the lifetime of policies, which can be over many years. This is the ‘estua-re\u2019 Blockchain solution which DataArt developed for us and it\u2019s a global first.<\/p>\n","protected":false},"excerpt":{"rendered":"

Smart technologies are radically improving the way businesses operate and Blockchain is one such example that is creating efficiencies, particularly for the finance sector. Maarten Ectors, Chief Innovation Officer at Legal & General, tells us how its Blockchain system – created by DataArt and hosted by Amazon – has enhanced its operations by enabling secure […]<\/p>\n","protected":false},"author":21,"featured_media":34890,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[42,205,51,93,23,24],"tags":[1093,13740,1094,13736,13737,13653,13741,13651,13739,143,13735,13738],"class_list":["post-34889","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking-finance","category-case-studies","category-case-study-newsletter","category-top-stories","category-united-kingdom","category-used","tag-amazon","tag-amazon-managed-blockchain","tag-amazon-web-services","tag-dataar","tag-estua-re","tag-future-ventures","tag-hyperledger-fabric-blockchain","tag-legal-general","tag-legal-general-reinsurance","tag-lg","tag-maarten-ectors","tag-pension-risk-transfer"],"acf":[],"publishpress_future_workflow_manual_trigger":{"enabledWorkflows":[]},"_links":{"self":[{"href":"https:\/\/www.intelligentcio.com\/eu\/wp-json\/wp\/v2\/posts\/34889","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.intelligentcio.com\/eu\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.intelligentcio.com\/eu\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.intelligentcio.com\/eu\/wp-json\/wp\/v2\/users\/21"}],"replies":[{"embeddable":true,"href":"https:\/\/www.intelligentcio.com\/eu\/wp-json\/wp\/v2\/comments?post=34889"}],"version-history":[{"count":6,"href":"https:\/\/www.intelligentcio.com\/eu\/wp-json\/wp\/v2\/posts\/34889\/revisions"}],"predecessor-version":[{"id":34903,"href":"https:\/\/www.intelligentcio.com\/eu\/wp-json\/wp\/v2\/posts\/34889\/revisions\/34903"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.intelligentcio.com\/eu\/wp-json\/wp\/v2\/media\/34890"}],"wp:attachment":[{"href":"https:\/\/www.intelligentcio.com\/eu\/wp-json\/wp\/v2\/media?parent=34889"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.intelligentcio.com\/eu\/wp-json\/wp\/v2\/categories?post=34889"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.intelligentcio.com\/eu\/wp-json\/wp\/v2\/tags?post=34889"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}