Maritime insurance industry implements blockchain technology
- Ernst and Young and Guardtime are offering the first blockchain platform for the marine insurance sector, according to a press release from EY.
- The platform was developed through a collaboration with A.P. Møller-Maersk, ACORD, Microsoft, MS Amlin, Willis Towers Watson and XL Catlin. A 20-week proof of concept pilot was held in advance of the release.
- The new platform connects clients, brokers, insurers and third parties to ledgers holding data about identities, risk and exposures; it then integrates this information with insurance contracts.
Blockchain technology is making its way into a number of industries thanks to its ability to self-verify, streamline processes and maintain privacy and security. While many businesses have been experimenting with the technology, its applications for insurance companies and their clients to develop contracts are especially promising.
On a blockchain platform, two companies can create a smart contract that sits on the network and automatically enforces itself. This reduces the need for certain accounting services, saves money and provides an added level of security. It becomes harder for a client to cheat his insurer, and vice versa.
Not only do smart contracts built on blockchain ensure trust and bigger profit margins, but they're also less susceptible to hacking or unauthorized modification. Every adjustment to applications on blockchain must be verified by one of the network members, making it very difficult for a hacker to change or steal important information.
While blockchain has yet to be applied generally, it's already proving itself useful to the shipping industry and its insurers.