Corporate pension deals will for the first time operate on a blockchain system under a new partnership between Legal and General and Amazon.
Reuters reports that Amazon Web Services’ managed blockchain system will be employed by L&G to handle bulk annuities, where defined benefit entitlements are passed over to L&G.
The news service quotes Legal & General Reinsurance chief executive Thomas Olunloyo as saying blockchain suits “the long-term nature of annuities business as it allows data and transactions to be signed, recorded and maintained in a permanent and secure nature over the lifetime of these contracts, which can span over 50 years”.
Initially, L&G’s bulk annuity business blockchain platform will only be used for that type of business, and only outside of Britain and the United States.
However, an L&G spokesman tells Reuters those two core markets could see the technology extended to them in time.
AWS general manager for Amazon Managed Blockchain Rahul Pathak says that because of the deal, L&G can now “focus on building new business…instead of dealing with the challenges of keeping a blockchain network up and running”.
Blockchain is the leger technology that underpins cryptocurrencies like Bitcoin, allowing the processing and settlement of transactions across a shared database without centralised authority.
While many had hoped major banks would employ blockchain, which has been around for some ten years, to help reduce the cost of retail services, few major brands have made significant strides using the technology, despite millions in investment.