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‘Big four’ accounting house EY, technology giant Microsoft and the Maersk, the world’s largest shipping company have combined to launch the world’s first marine insurance blockchain platform.
Build using Microsoft’s Azure cloud platform, the blockchain solution is the first of its kind in the marine insurance industry and connects clients, brokers, insurers and third parties on a common ledger. This shared database also collects information about logistics risks and shipments to integrate the data with insurance contracts.
The 400-year-old marine insurance sector is among the most inefficient areas of the global insurance industry, according to EY’s global insurance leader Shaun Crawford. Shipping companies pay some $30 billion in premiums annually, according to Reuters.
“Insurance transactions are currently far too tedious and frictional,” stated Maersk head of risk of insurance Lars Henneberg. “The distance between risk and capital is simply too far. Blockchain technology has the potential to facilitate the desired development that is long overdue.”
The blockchain platform will address challenges of different facets of a complex international ecosystem including long paper chains, high transaction volumes and reconciliation levels, according to Crawford.
He stated:
This solution is the first to apply blockchain’s transparency, security and standardization to marine insurance and is ready for commercial use.
The blockchain platform has already proved successful with a 20-week proof of concept. The prototype was built on Microsoft’s Azure cloud computing platform, which unveiled its newest blockchain protocol in the Confidential Consortium (Coco) framework last month.
Maaersk has notably engaged in a blockchain endeavor with IBM to create a supply chain that will include freight forwarders, ocean carriers and ports on a ledger. The project’s goal is to put 10 million Maersk containers on a blockchain by this year’s end.
Elsewhere, Samsung SDS – the IT subsidiary of electronics giant Samsung – is launching a pilot blockchain project for Korea’s shipping logistics industry to track imports, exports and cargo shipments in real-time over a blockchain. Two Singaporean maritime giants are also partnering IBM to trial blockchain technology for the supply chain network in south east Asia.