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Maersk and partners launch marine insurance blockchain

Maersk and global partners Consultancy EY, data security firm Guardtime and Microsoft have announced the launch of a new blockchain-based marine insurance platform. It will be the first use of the nascent technology in the shipping industry.

This platform aims to connect marine insurance customers with brokers, insurers and third parties via distributed common ledgers to share relevant data, and integrate that information with subsequent insurance contracts.

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.

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.”

Maersk’s involvement in the project is driven by a desire to increase the efficiency of its interactions with insurance industry stakeholders, to make the process more convenient and less costly on all sides.

The blockchain platform should support this by making it more straightforward to manage this complex international ecosystem, which currently involves multiple parties, long paper chains and duplication, high transaction volumes and significant levels of reconciliation. Potentially, the new technology should allow the parties involved to connect their disparate data sets and processes to mitigate these issues.

“It is a priority for us to leverage technology to streamline and automate our interaction with the insurance market,” said Lars Henneberg, A.P. Møller-Maersk’s head of risk and insurance.

Other partners in the marine insurance blockchain project include ACORD, MS Amlin, Willis Towers Watson and XL Catlin.

 


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