Insurance Networking News: American Century Life announced this week that it would begin accepting Bitcoin to pay premiums. Why did you decide to do that?
Silberman: We think life insurance is an important product. We hear about people who passed away and don't have anything left behind to cover funeral expenses. Then they have to go family and friends, and it's obviously not a good situation. So however you want to be able to buy your policy or pay for for it, we want to be able to accept it. That goes for cash, checks, credit cards, and now Bitcoin. And we think Bitcoin will be an important tool in the future, so we want to be there.
INN: So are you trying to target a specific audience with this move? Or is it just a matter of accepting as many payments forms as possible so you don't lose business?
Silberman: For us it's really just another payment option or currency. But I also believe that you can't decide to be innovative on Monday and then turn that off on Wednesday. If you want to be innovative, you have to be innovative all the time. We want to be involved in Bitcoin so that we can learn from it. And that will help us build better relationships and be innovative every day of the week.
And Bitcoin still has limitations [as a payments tool] -- for instance, you can't make recurring payments with it. But there are people who are probably smarter than me who are working to figure that out. I'm sure that Bitcoin will develop, and what we see in two or three years will be very different than the Bitcoin we see today. At this point we don't know where the innovation will lead. Bitcoin could go places that we can't imagine today.
INN: What kind of work did you have to do to be able to accept Bitcoin in terms of IT integration?
Silberman: We use the platform that Stripe is offering. It was a really clean integration. We had to integrate it with our website and our back office. But it was really easier than you'd expect.
INN: Some suggested on the original artivcle that accepting Bitcoin could affect reserving. After you collect Bitcoin payments, what do you do with them? Are you going to hold on to them or covert them right away into currency?
Silberman: This platform automatically converts the bitcoins into US dollars and we receive US dollars into our account when the transaction clears. Therefore, we do not hold bitcoins at any time in the process. Dell announced that that they're accepting Bitcoins, and they're converting them right away to US dollars. We're doing the exact same thing. We will pay all benefits in US dollars. To us, it's just like taking Canadian dollars. From the regulatory perspective, [if we were to hold Bitcoin reserves] would it be part of our cash reserves or a currency investment? I don't really know.
INN: Is there something specific to life insurance that you think makes it a natural product to accept Bitcoin payments for?
Silberman: With life insurance the life cycle is so long compared to other products, so there are a lot of unknowns there with 20-year policies. You have to be conservative, and be prepared for how people will pay in the future.
INN: Are there ways that you're looking to expand your use of Bitcoin down the road?
Silberman: We are thinking about how we can expand our use of Bitcoin. We want to be as innovative as possible. As Bitcoin develops, and it becomes more flexible and advanced, we will definitely expand our use of it.
INN: There's a lot of discussion within the Bitcoin community about how the technology behind it could be used for things other than payments. Do you see opportunities for that in insurance?
Silberman: Right now I can't see specific way that that the Bitcoin infrastructure could help in insurance. I've talked to people who are starting some discussions around that. If you think about the premiums and claims side, there might be a way to use it for capital pooling. I don't know. There could be ways to use it for issuing policies. Why not?
To me, with technology, the question isn't "why use it?" It's "why not use it?" I've worked at organizations where the attitude is why would you interrupt things for a new technology? But if it's a great technology, why not interrupt things for it?
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