There’s no stopping blockchain, is there? From simplifying complicated insurance policies to automating administrative functions, now the technology has forayed into marine cover.
Following a 20-week proof of concept, the first-ever blockchain platform for marine insurance was launched by EY and Guardtime in association with A.P. Møller-Maersk A/S,
ACORD, Microsoft,
MS Amlin, Willis Towers Watson, and XL Catlin.
Built on Microsoft Azure global cloud technology, the platform connects clients, brokers, insurers, and third parties to distributed common ledgers. Data in these ledgers – such as identities, as well as risk and exposures – are integrated with insurance contracts.
Marine insurance, according to Microsoft Azure chief technology officer Mark Russinovich, is a prime example of a complex business process that can be optimised with blockchain. EY said the blockchain platform connects disparate data and processes in order to mitigate issues related to reconciliation and error applicability.
Capabilities of the platform include:
- Creating and maintaining asset data from multiple parties
- Linking data to policy contracts
- Receiving and acting upon information that results in a pricing or a business process change
- Connecting client assets, transactions, and payments
- Capturing and validating up-to-date first notification or loss data
“Blockchain’s potential to transform the insurance ecosystem has always been clear. What we have done is to move forward from potential to reality,” commented EY global insurance leader Shaun Crawford.
He said this solution – the first to apply blockchain’s transparency, security, and standardisation to marine insurance – is ready for commercial use. The platform is planned to be implemented starting 2018.
Crawford added: “We look forward to deploying this technology across the marine insurance industry and are exploring how these findings and insights will be applied to other specialty insurance markets and beyond.”
For Lars Henneberg, A.P. Møller-Maersk A/S head of risk and insurance, it is their priority to leverage technology to streamline and automate interaction with the insurance market.
“Insurance transactions are currently far too tedious and frictional. The distance between risk and capital is simply too far. Blockchain technology has the potential to facilitate the desired development that is long overdue,” said Henneberg.
According to Guardtime chief executive Mike Gault, the KSI® blockchain stack is a proven technology for securing the physical, software, and information supply chains that enterprises rely on for the integrity of their businesses.
Bill Pieroni, ACORD president and CEO, noted: “This first-of-a-kind effort has the potential to dramatically reduce time, cost, and risk across the entire insurance value chain. ACORD looks forward to working together to help our members realise the benefits associated with blockchain.”
The collaboration, according to Dr Paul Taffinder, director of strategy and innovation at MS Amlin, began in 2016 “with an intuitive belief that blockchain technology could transform the marine insurance market.”
Willis Towers Watson chief data officer Simon Gaffney concurs, saying: “Redesigning the insurance process is critical for the evolution of our industry. This initiative has the potential to streamline and simplify insurance transaction efficiency using new technologies, an essential development for the insurance industry.”
Martin Henley, chief information officer at XL Catlin, described the successful proof of concept as ground-breaking. “While the insurance industry has been looking at blockchain as a way to disrupt some of its processes and become more efficient, this will lead to ‘real-life’ innovations. We will learn from those and apply them to other insurance segments – and ultimately better delivery for our clients across the industry.”
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