Exclusive Interview: Tokenisation revolutionising life insurance

Eric Stearns, who entered the life insurance industry over thirty years earlier, probably did not imagine that technology would transform his world. Stearns Financial Group and Infineo, an innovative digital platform designed to “tokenise life insurance”, teamed up in order to achieve this. 

Yes, you did read it correctly: tokenise. It’s a way to turn a life-insurance policy into something that you can trade and split up into smaller pieces. You could also make it liquid like stock on an exchange. It’s neither bitcoin nor crypto. 

This partnership could have been lifted from a sci fi finance novel. It is driving one of the most daring experiments in asset tokenisation. The answer to this game-changing question is simple: what if life insurance policies were traded, fractionalised and converted into liquid assets? 

The players and their connections

Jay Rogers is his colleague, who was previously with Stearns but now leads revenue at Infineo. Robert Murphy, Infineo Chief Economist is one of the brains behind The Ledger, Infineo’s blockchain-based platform. 

Infineo was created to investigate how blockchain can revolutionize the management of permanent insurance. They’d already transferred $344 million worth of life insurance to the blockchain before the merger. 

This number has now risen to $560,000,000. Stearns had the institutional pipeline with a proven product, and Infineo provided the digital rails. Together, they are chasing an unnoticed market gap.

What on earth is a Split-Dollar Plan?

For you to get their strategy, you need to be familiar with CASD plans. These retirement benefits are used by hospitals, credit unions and universities to attract and retain top executives. Here’s how it works: The employer buys a life-insurance policy for the executive. They then agree to share the benefits.

When the executive dies, the employer recovers their investment. The executive can receive retirement income during their lifetime and the rest of the death benefits are paid to the family. It sounds great, doesn’t it? But there is a catch.

Stearns, a man who has seen it all, says bluntly: “You cannot predict when someone is going to die.” Credit unions are forced to hold capital for up to 40 years in order to recover their investment. It’s going to be a long road.”

The magic begins. By pooling thousands policies into a single trust and using statistical death models, they reduce risk and accelerate the return time. This trust? LifeNotes is the name.Rogers says, “It is about turning uncertain long-term assets into something that has predictable yields and fixed duration,” with the confidence and assurance of someone who’s rewriting rules.

Create a New Asset Class

They’re reinventing the whole life insurance industry. These policies have traditionally been viewed as static safety nets that pay out only upon the death the insured. Here, they are turning them into something dynamic, alive and productive.

“These products are designed to benefit the whole family,” Dr. Murphy says. He has that professor vibe, which makes you grab a pen and paper. “It is not just about payouts at death. These policies are a source of growing cash that you can use to collateralize loans. This collateral does not lose its value, unlike real estate. 

Tokenisation lets them break policies into parts—cash value, guaranteed returns, death benefits—and then reassemble and sell those parts based on what investors are hungry for.Stearns, with his eyes aglow, says that they are not simply moving the analog world to the blockchain. “We’re improving it.”

From paper to protocol

The Ledger’s tech core is Provenance, which is a layer one protocol for traditional finance compliance. It was created by Mike Cagney, the guy behind SoFi and now Figure, which has already shaken up the home equity line of credit (HELOC) industry, originating 15–20 per cent of all U.S. HELOCs on-chain.

The same blockchain power is being used to insure life insurance. Infineo’s tools for Provenance allow users to track the policies uploaded by both institutions and individuals. Each policy is carefully checked, recorded accurately, and monitored closely to ensure its reliability and integrity. Notifications are sent if the insured dies, and claims start to be processed.

Stearns says with a touch of frustration, “Everyyear, tens and millions of dollars in life insurance are not claimed.” “People forget. Families are unaware of what is out there. The Ledger is the solution.The Ledger fixes that. 

Why credit unions? 

Credit unions are at the core of it all. Stearns book provides Infineo with a good testing ground, as it has over 100 clients in 30 states.Rogers, whose enthusiasm is contagious, says that credit unions are similar to TradFi DAOs. They’re already cooperative, member-owned and community-focused. This mindset is perfect for decentralised technology.

Credit unions also hold approximately $9 billion of split-dollar loans. Infineo provides liquidity, risk reduction, and compliance all in one package by tokenising these loans.

Rogers explains that “our clients already use whole life insurance as a way to reward and retain their talent.” “Now they can do smarter.”

Beyond Institutions

The goal is to make these instruments available to all investors.

Dr. Murphy is so confident that he makes you sit straight up when he says “some whole life insurance policies, when you take into account risk, perform better than almost any other asset.” “But they are complex and varied financial instruments, which require an insurable rate of interest and have upfront costs.” As an asset, they are largely untouchable by most people.

Tokenisation alters that.”Eventually, ordinary people will be allowed to choose from curated bundles that include policies with specific features, such as guaranteed yields and mortality profiles.Murphy says that it’s similar to going from purchasing a home to investing in shares of a real estate trust. “But for life assurance.”

The road ahead

Fineo has launched The Ledger with The Ledger. They are also testing the issuance of tokens internally. They plan to offer tokenised pools of life insurance to institutional clients by the end of this year. Retail access will be later.

For the moment, they are calling on hospitals, universities, banks and credit unions to test out this platform.Rogers declares with the confidence that someone who holds a winning card, “Any organization offering split-dollar programs should be looking into this.” “It reduces the duration of the plan, improves transparency and gives more value to the institution and individual.”

“We’re a lot more than tokenising insurance,” Dr. Murphy says. We are redefining ownership.Stearns & Infineo, from split dollar to digital dollars are writing a brand new chapter in life insurance. It’s a future that feels, quite frankly.