Startup InsurTech Award - Tontine Trust

1. THE FUTURE OF RETIREMENT ASSETS
DEAN McCLELLAND, FOUNDER & CEO

2. The good news:
Japan continues to be a world leader!
日本は勝者です

3. The bad news:
Retiring too early is now a big risk

4. This problem
is already too
large for
governments
to solve
The Greek Debt Crisis vs. The Pensions Blackhole

5. How we can we solve big problems like this?
1. Re-introduce Tontines 2. Add Blockchain for Immutability and
Transparency
3. Use Artificial Intelligence to
prevent human error

6. 10,000 members
contribute capital to
receive lifetime
monthly payouts
As member numbers
decline, monthly
capital payouts
increase
At the end, the
Tontine reaches zero
How does a Tontine work?

7. The History of Tontines
Tontine
Concept
Tontine
Insurance
Launched in
the US
First Tontine
1653 1670 1689 1693 1868 2018
?? ?

8. How popular are Tontines?
5.774
0.998
USA 1868 - 1905: SALES
TONTINES VS. ANNUITIESBn USD
Source: Davis, Lance E. with Robert Cull(1994) International Capital Markets and American Economic Growth, 1820–1914, Cambridge University Press
“more money can always be
raised by tontines than by
annuities” Adam Smith, The
Wealth of Nations, 1872
1868-1905:
0% -> 50% of Households
0% -> 7.5% of US Wealth
5x

9. If Tontines were so popular, what happened to them?
In 1905, it was discovered that Financial Institutions
had started cheating consumers.
Instead of sticking to the rules for selling “fair”
Tontines, they switched to selling Annuities, where
they kept the profits instead of the members.

10. Technology Choices
Public Ledgers
Unrestricted Assets
Recording & tracking
payments made &
balances held in TON$ &
for exchanging of FIAT for
TON$, our bridge currency
Public Ledgers
Restricted Assets
Recording & tracking
transactions in underlying
investment portfolios of FIAT &
other traditional assets such as
Bond/Equity ETFs, or Gold etc.
Public Permissioned
Smart Contracts &
Ledgers
Smart-Actuary Logic execution,
risk modelling, interfaces with
Oracles for Biometric
Authentication, Actuarial &
Investment Data.
Maintains Tontine member
balances & changes.

11. Market Opportunity for Tontine Pensions
Existing Global
Annuity Market
¥ 38 Trillion /
$350 Bn
Per Year
Top 1%
Market that is not
captured
by existing products
Existing Mkt
Residents of Countries with no ‘real’ social
security system

12.  A Centralised Issuer can default
(King of France in the 1860s) or
be nationalized (Argentina Pensions, 2008)
 Insurers tampered with the membership ledgers,
(US ~1905)
 Insurers charged excess costs (US ~1905)
 Insurers corrupted the assets (US ~1905)
 Many works of fiction imagined how members
could murder each other
 Families could cheat by substituting living relatives
for dead members
 Tontines are decentralized & supranational.
No central guarantor = no default,
No single country = no nationalization
 Membership & entitlement ledgers are now distributed
on a blockchain & become immutable
 Fees are restricted by Smart Contracts & fee payments are
100% transparent
 Asset management policies are restricted by Smart
Contracts & are always 100% transparent
 Members and groupings are pseudonymous
 Biometric authentication with 37+ points of recognition
confirms identities, detects proof of life, prevents cheating
Appendix 1: Modern Improvements to Tontines