Global shipping operator Maersk is targeting January 2018 for implementation of a new marine insurance platform that utilizes blockchain technology. Partnering with Microsoft and Dutch software security firm Guardtime for technical support throughout a recent trial period, this announcement signals another vote of confidence for the enterprise application of distributed ledger technology (DLT). Blockchain technology traces its origins to the cryptocurrency space but its high potential for financial and data security benefits has captured the attention of industry leaders in the financial services, healthcare, banking and insurance industries.
Marine insurance is a $30B market space with a legacy that is measured in centuries. Facing lean margins after years of pressure on insureds resulting from reductions in global shipping demands and inefficiencies that are inherent to the business, Maersk and their partners are hoping the new platform will improve performance metrics through:
- Creation of secure and transparent databases to track real time shipment information and transit risk profiles
- Incorporation of shipment databases directly into applicable insurance contracts
- Confirmation of shipment compliance with insurance loss control standards and transportation or trade regulations that frequently traverse multiple international jurisdictions
- Settlement of “smart contract” transactions that won’t require third-party verification
- Access to shipment data across complex and variable networks for all stakeholders, including vendors, customers, insurers, and brokers
Engagement with this emerging technology is rapid and has established itself as a top priority for consideration as company leaders balance its projected advantages and risks for the future of their organizations. Information security persists as an absolute requirement, particularly for industries such as insurance where the terms and conditions of policies and contracts can be quite sensitive to proprietary concerns and uniquely based on historical relationships in very competitive landscapes. The potential benefits of blockchain are significant and as application progresses beyond proof-of-concept trials, its successful maturation may prove to be a smart bet for early-adopters such as Maersk.
Written by Crypto 101 contributor Ryan LaMonica