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MetLife Looks to Utilize Blockchain

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MetLife(MET - Free Report) , the largest player in a $2.7 trillion life insurance industry, recently announced a trial run of a completely revamped claims process. Blockchain, the technology underpinning cryptocurrency, will be utilized by MetLife in this significant procedural change. This may have a large impact, as the company has over 90 million customers in over 60 countries.

The Change

The company may be using the Ethereum blockchain to redo its life insurance claims network. This project is being run by and was developed at MetLife’s incubator LumenLab in Singapore. LumenLab is partnering with Singapore Press Holdings and NTUC Income for the trial run.

A large problem with current life insurance is families with recently deceased loved ones forgetting to file for life insurance-claims, or not knowing that their loved ones had a life-insurance policy at all. This lack of information on both sides of the insurance policy is not beneficial for insurers or claimants.

MetLife’s trial system looks at obituaries placed with Singapore Press Holdings, then takes the deceased’s National Registration Identity Card number from the death certificate and encrypts it into the blockchain. NTUC then searches this number against its records to check for a policy match. If one is found, the family will be notified within one working day and an automatic email will be sent to the insurer to initiate the claims process.


The efficiency and transparency of this claims process could result in huge benefits to consumers. Families of policy holders would likely be paid out quicker and with a higher rate of fulfilled claims. Using blockchain is also much more secure, as no piece of information in a block can be altered.

However, the benefit that the market would care about is that of profit margins. Using blockchain to process claims and notify families is much cheaper than the manual alternative. This could allow MetLife to spend less on administrative costs, and therefore generate greater earnings.

MetLife is currently a Zacks Rank #2 (Buy) with style scores of A in Value and B in Momentum. Zacks Estimates projects strong year-over-year earnings growth of 4.08% for 2019 and 8.35% for 2020. Most analysts covering MetLife have revised up their earnings estimates for this year and next as well.

Also, important for long run benefits is the ease of expanding a decentralized network like the blockchain. MetLife could easily add other key stakeholders to the network, like the government or other insurance providers like Prudential(PUK - Free Report) or Allianz(AZSEY - Free Report) . However, one challenge with expanding is the potential need to utilize other blockchains like Bitcoin or Ripple due to the Ethereum currently only being able to handle an average of 13 transactions per second.

Long-term Effects

With large companies like MetLife starting to experiment with and adopt blockchain technologies, it will likely further legitimize the blockchain and the cryptocurrencies based on it. One could even see a future where cryptocurrency is used to payout claims over the blockchain as well. Eventually, the entire insurance claims and payouts process could be completed over the blockchain in an efficient and completely secure manner.

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