Startup life insurer Meanwhile is betting that a target market of high-net worth individuals will respond to its bitcoin-denominated policies and premiums for coverage.
Co-founder and CEO Zac Townsend believes so strongly in the value proposition for bitcoin-based life insurance that Meanwhile's balance sheet, its financials and its operations are all conducted in bitcoin. He says Meanwhile's policies are meant to pass on intergenerational wealth, rather than the traditional life insurance function of protecting beneficiaries against loss.
"We're not out there trying to sell bitcoin life insurance to your average life insurance user," he said. "We're going to people who have already bought into bitcoin and the crypto economy. We're not trying to convince people to buy crypto if they don't have crypto."
Townsend and co-founder Max Gasner, Meanwhile's CTO, started the company in 2021 and got its first funding round in January 2022. In June 2023, Meanwhile announced $19 million in new funding from two seed rounds including investments by Sam Altman, CEO of OpenAI; angel investor Lachy Groom, formerly head of Stripe Issuing; and Gradient Ventures, Google's venture capital arm.
Townsend asserts that bitcoin is a better way to store value in life insurance and for beneficiaries. "Bitcoin is the oldest and most mature cryptocurrency. Life insurance is about potentially you dying and passing something on to your beneficiaries," he said. "For bitcoin, its narrative is very much around the store of value, and it's very much around, for some people, intergenerational wealth accumulation."
Townsend calls the bitcoin denomination of Meanwhile's balance sheet and its policies a hedge against volatility. He asserted that a recognized government-backed currency such as Swiss francs can also fluctuate, and while bitcoin's fluctuations can be greater, having all the operations in bitcoin means the reserves, capital, assets and liabilities hold at steady amounts.
While accounting balance sheets can be presented differently depending on the standard or principles being used (such as GAAP), denominating a balance sheet in bitcoin raises concerns, according to John Keddy, senior principal at consultancy Datos Group.
"There's different types of assets that you need to hold for reserves. And they have different risk factors or weights," Keddy said. "Let's say for sake of argument, someone said, 'We're gonna sell a whole bunch of life policies, or a whole bunch of annuities. And the reserves are 100% bitcoin.' Most would have a lot of questions about that, because that would be rated as a relatively high risk asset class."
Meanwhile's Townsend said the company is licensed by the Bermuda Monetary Authority to operate using a bitcoin denomination. Meanwhile spent about 18 months building a regulatory framework and getting regulatory approvals, he added, noting that in May 2022, Jim Cristallo, a 20-year veteran executive at New York Life, joined as chief insurance officer, and in January, Annie Tay, a risk solutions and actuarial expert since 2010 with previous experience at MetLife and A.M. Best, joined as chief risk officer.
Townsend sees Meanwhile's target market as cryptocurrency investors who are aging into their 30s and beginning to think about life insurance and wealth transfer. "It's a very hard pitch to say to those folks, you should really be thinking about this complicated variable universal life policy," he said. "The narratives of life insurance don't necessarily resonate with younger people. Having the hook of bitcoin and crypto allows us to engage in those conversations. Because our product is new and the space is new, we've deliberately come to market with a very straightforward, easy to understand product. And that resonates with younger users more easily."
