Shipping behemoth Maersk has tied in with Ernst & Young and Microsoft to launch and use the world’s first blockchain platform for marine insurance. The platform has been built on the Microsoft Azure cloud that uses ACORD standards and is a first in the global marine insurance industry.
It connects brokers, clients, third parties, and insurers by way of a common ledger. Moreover, this database collects shipment and logistics risks information and integrates this data with the appropriate insurance contracts.
Even though the global shipping sector pays around a whopping $30 billion by way of premiums for marine insurance, it has by and large scattered, somewhat inefficient, frictional, and tedious, which has only widened the gap between capital and risk.
This platform has been created to address and tackle challenges including higher transaction volumes and reconciliations and long paper chains. The blockchain security, transparency, and standardization are all too evident in this platform, which is now ready to be used commercially.
Lots of containers
Maersk, which owns 350 container vessels, has already been operating this platform for 20 weeks and it was unveiled at the Coco or Confidential Consortium framework recently. The company collaborated with IBM for the creation of a supply chain that includes ocean carriers, freight forwarders, and multiple ports on a ledger. Maersk aims to put 10 million containers on blockchains by 2018 end.
In its first year of operations, Maersk is using Insurwave for the management of 1,000 vessels and will also be supporting over 500,000 transactions on its digital ledger.
The platform is automating manual processes and eliminating a number of inefficiencies that are so common in marine insurance. The platform’s developers, E&Y, Microsoft, and Guardtime plan to include global logistics, marine cargo, and the energy and aviation sectors in the future.
It is predicted that blockchain technology will revolutionize marine insurance in future because of its ability to simplify operations, streamline transactional processes, and create additional value for Maersk’s clients. Here the company’s policies will automatically update to reflect the risk of using smart contracts and IoT.
It may be recalled that blockchain technology has found use in the insurance industry as early as March this year, when several global players in the insurance sector launched a blockchain startup in Zurich. This was followed by international insurance company Marsh announcing a partnership with IBM in April to launch a commercial blockchain solution for proof-of-insurance.