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The Next Frontier: Digital Asset–Linked Life and Annuity Products

Background and Purpose

The insurance industry is witnessing an emerging intersection where digital assets are integrated directly into life insurance and annuity product designs and insurer balance sheets. While the Society of Actuaries (SOA) Research Institute has previously explored the foundational aspects of blockchain and decentralized finance (DeFi)* (see Appendix), this project focuses specifically on traditional life and annuity products linked to digital assets rather than insurance coverage for digital asset risks (e.g., custody insurance).

Innovative market developments underscore this trend:

  • Bitcoin(BTC)-Denominated Policies: Emerging product and balance sheet innovations include whole life insurance policies denominated entirely in Bitcoin (BTC), where the insurer maintains a BTC-centric balance sheet to support these liabilities.
  • BTC-Linked Fixed Indexed Annuities(FIAs): Recent product launches include novel FIAs that allow policyholders to gain indexed exposure to Bitcoin’s market performance while maintaining traditional principal protection.
  • Regulatory Evolution: The BMA has introduced guidance for captive insurers to use stablecoins, generally limiting holdings to 25% of the capital base.

This research aims to provide actuaries with a comprehensive framework for evaluating the market opportunities, distribution strategies, modeling requirements, and risk management protocols for these products.

Research Objective

The research report should discuss the major considerations. It could highlight the following areas not limited to:

  • Market Landscape and Case Studies
    • Conduct a survey of emerging initiatives across jurisdictions (e.g., U.S., Bermuda, and international markets).
    • Provide detailed case studies on current product offerings (e.g., BTC-denominated life insurance and BTC-linked FIAs).
  • Product Design, Marketing, and Distribution
    • Analyze potential structures for life and annuity products, identifying target markets and distribution channels.
    • Evaluate the value proposition for policyholders versus traditional equity-indexed or variable products.
  • Risk Frameworks and Operational Considerations
    • Establish a framework to identify and manage key risks for digital asset-linked products. Relevant examples include asset risk, asset-liability mismatches, custodial risks like cyber-theft, and risk mitigation via hedging and reinsurance. Proposals may also address operational execution friction points, such as financial reporting, actuarial valuation and modeling, policy administration, and compliance (e.g., Anti-Money Laundering).
  • Regulatory Landscape
    • Provide an overview of the evolving global regulatory landscape, highlighting jurisdictions with established frameworks for digital asset integration (e.g., Bermuda licenses and stablecoin guidance).

Proposal Requirements

To facilitate the evaluation of proposals, the following information should be submitted:

  1. Resumes of the researcher(s), including any graduate student(s) expected to participate, indicating how their background, education, and experience bear on their qualifications to undertake the research. If more than one researcher is involved, a single individual should be designated as the lead researcher and primary contact. The person submitting the proposal must be authorized to speak on behalf of all the researchers as well as for the firm or institution on whose behalf the proposal is submitted.
  2. An outline of the approach to be used (e.g., literature search, model, survey, interviews etc.), emphasizing issues that require special consideration. Details should be given regarding the techniques to be used, collateral material to be consulted, reusability and limitations of the analysis.
  3. A description of the expected deliverables and any supporting data, tools, or other resources. Consideration should be given to the preference for externalized data that can be included in the AITPSC’s data repository.
  4. Cost estimates for the research, including computer time, salaries, report preparation, material costs, etc. Such estimates can be in the form of hourly rates, but in such cases, time estimates should also be included. Any guarantees as to total cost should be given and will be considered in the evaluation of the proposal. While cost will be a factor in the evaluation of the proposal, it will not necessarily be the decisive factor.
  5. A schedule for completion of the research, identifying key dates or time frames for research completion and report submissions. The AITPSC is interested in completing this project in a timely manner, with an aim to publish the paper in xxx or earlier. Suggestions in the proposal for ensuring timely delivery, such as fee adjustments, are encouraged.
  6. Other related factors that give evidence of a proposer's capabilities to perform in a superior fashion should be detailed.

Selection Process

The SOA will appoint a Project Oversight Group (POG) to oversee the project. The POG is responsible for recommending to the Section Research Committee the proposal to be funded, if any. Input from other knowledgeable individuals also may be sought, but the Section Research Committee will make the final recommendation, subject to Society of Actuaries Research Institute (SOA) leadership approval. An SOA staff research actuary will provide staff actuarial support.

Questions

Any questions regarding this RFP should be directed to research-ait@soa.org with the subject line “The Next Frontier: Digital Asset–Linked Life and Annuity Products.”

Notification of Intent To Submit Proposal

If you intend to submit a proposal, please email written notification by June 30, 2026, to research-ait@soa.org with the subject line “The Next Frontier: Digital Asset–Linked Life and Annuity Products.”

Submission of Proposal

Please email your proposal to research-ait@soa.org with the subject line “The Next Frontier: Digital Asset–Linked Life and Annuity Products;” proposals must be received no later than July 15, 2026. It is anticipated that all proposers will be informed of the status of their proposal by the end of September 2026.

Conditions

The selection of a proposal is conditioned upon and not considered final until a Letter of Agreement is executed by both the Society of Actuaries Research Institute and the researcher.

The Society of Actuaries Research Institute reserves the right to not award a contract for this research. Reasons for not awarding a contract could include, but are not limited to, a lack of acceptable proposals or a finding that insufficient funds are available. The Society of Actuaries Research Institute also reserves the right to redirect the project as is deemed advisable.

The Society of Actuaries Research Institute plans to hold the copyright to the research and to publish the results with appropriate credit given to the researcher(s).

The Society of Actuaries Research Institute may choose to seek public exposure or media attention for the research. By submitting a proposal, you agree to cooperate with the [Society of Actuaries/sponsoring entity] in publicizing or promoting the research and responding to media requests.

The Society of Actuaries may also choose to market and promote research to members, candidates and other interested parties. You agree to perform promotional communication requested by the Society of Actuaries, which may include, but is not limited to, leading a webcast on the research, presenting the research at an SOA meeting, and/or writing an article on the research for an SOA newsletter.

Conflict of Interest

You agree to disclose any of your material business, financial and organizational interests and affiliations which are or may be construed to be reasonably related to the interest, activities and programs of the Society of Actuaries or the Society of Actuaries Research Institute.

Appendix

The cost ranges below are intended as a guide for budgeting project costs for proposals in response to SOA Research Institute Request for Proposals (RFP). Please note these figures span the 33rd to 66th percentiles for all projects as well as projects that involve a specific approach (lit review, survey, etc.). They are based on historical costs over several recent years. Expected costs for some RFPs may fall outside these ranges depending on the nature of the work and resources required for completion.

All Contracted Projects

This category includes all contracted projects that the Institute has undertaken within the last several years. The 33rd – 66th percentile project costs range is $25,000 – $50,000.

Literature Reviews

This category includes projects that involved only a literature review or the cost for the portion of a larger project that included a literature review. The 33rd – 66th percentile project costs range is $15,000 – $20,000.

Surveys

This category includes all projects that had a survey as their primary component. The 33rd-66th percentile project costs range is $28,000 – $55,000.

Appendix

A Risk Classification Framework for Decentralized Finance Protocols (September 2022).

Decentralized Finance for Actuaries: A Blockchain-Based Financial System (March 2022).

Decentralized Insurance Alternatives: Market Landscape, Opportunities and Challenges (September 2022).