The shipping industry appears to be one fraught with inefficiencies, making it ripe for the disruption that blockchain could potentially deliver.
A new team has formed comprised of Microsoft and EY working with Maersk on a blockchain project targeting marine insurance.
The goal of this initiative is to streamline the complex insurance process involved in shipping, that is currently extremely paper heavy.
While also using the distributed ledger to bring marine insurance into the digital world, it is also intended to seamlessly connect the various parties involved the process, ensuring a greater level of visibility and transparency.
Not only is this blockchain project set to make the process of managing marine insurance more efficient, but it is also planned to be beneficial for achieving regulatory compliance.
According to CNBC, Shaun Crawford, global insurance leader at EY, said: “The reason we chose marine (insurance) as the starting point for this sort of market is mainly because of its complete inefficiency… “The reason we chose marine (insurance) as the starting point for this sort of market is mainly because of its complete inefficiency.”
This is not the first instance of blockchain capabilities being explored for potential use cases within the shipping and logistics industry. In fact, Maersk has been working alongside IBM to use blockchain; this project was intended to revolutionise the supply chain process.
IBM and Maersk’s project is intended to create an expansive network of freight forwarders, ocean carriers, shippers, ports and customs authorities, all linked and brought together using the distributed ledger technology.
Insurance innovation has also previously been targeted with blockchain technology, during a successful project between IBM and AIG. This project created a ‘smart’ insurance policy capable of handling the management of international coverage, a process that is traditionally very complex.
Partners, IBM and AIG, managed to reach the stage of completion on a pilot policy for Standard Chartered Bank PLC. This was a major step forward, and other progress in insurance through harnessing cutting edge technology is being made in the emerging Insurtech market that is booming in the UK.