Shipping giant Maersk is working with insurers
MS Amlin and
XL Catlin in order to apply blockchain technology to “tedious and frictional” marine insurance.
The arrangement also includes working together with Microsoft, consulting firm
EY, and blockchain provider Guardtime.
The global shipping industry has been on the downturn for almost a decade, and many companies are looking to cut costs, reports Reuters. The container shipping sector, where Maersk is a huge player, is one of the worst-affected. A glut of vessels and unsteady demand have put great financial pressure on firms.
According to Shaun Crawford, global insurance leader for EY, the 400-year-old marine insurance sector was one of the most inefficient areas of the insurance industry. The sector has around US$30 billion in premiums paid each year.
Blockchain is considered a tamper-resistant protocol that is shared and updated in real time. Using “smart contracts”, it is able to automatically process and complete transactions without the need for third-party verification.
EY and Guardtime said that the platform, based on Microsoft’s Azure cloud-based platform, has already been built. It will be deployed in January, when Maersk, MS Amlin, and XL Catlin will apply it to real-world maritime insurance.
Mike Gault, chief executive of Guardtime, said blockchain was “absolutely essential” in making allowing all parties – including shipping firms, insurers, brokers, and other suppliers – to have access to the same database, which can be integrated into insurance contracts.
In a statement, Lars Henneberg, Maersk’s head of risk and insurance, praised the development. “Insurance transactions are currently far too tedious and frictional,” he said. “Blockchain technology has the potential to facilitate the desired development that is long overdue.”
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