A blockchain that is said to be the first for $30 billion marine insurance is now in commercial use, according to a coalition of technology, insurance, marine and consulting businesses.
EY, Guardtime, A.P. Møller-Maersk, Microsoft and insurance partners Willis Towers Watson, XL Catlin, MS Amlin and ACORD said members of the marine industry are now using Insurwave, a blockchain platform to support marine hull insurance. Global businesses can use the platform to transform how they manage risk across their organization, and how they work with brokers and (re)insurers.
Insurwave was built by a joint venture between consultant EY and blockchain developer Guardtime using distributed ledger technologies by Microsoft Azure infrastructure and following ACORD data standards. It will support more than half a million automated ledger transactions and help manage risk for more than 1,000 commercial vessels in the first year, according to its developers.
The platform establishes a digital insurance value chain, connecting participants in a private network to a shared database in real time. Transactions that otherwise can take days can be processed automatically in minutes using computer algorithms with no need for third-party verification.
Container shipping industry giant A.P. Moller – Maersk contributed to the development of the blockchain technology as a pilot client and is continuing on the platform with its marine hull portfolio.
Lars Henneberg, head of Risk and Insurance for A.P. Møller-Maersk, said his company is looking to streamline areas of its industry that still rely on manual and often complex procedures. “Operating around 350 owned container vessels across the world, marine insurance takes up considerable resources for us,” Henneberg said. “Moving it to this platform is helping us automate manual processes and alleviate a range of inefficiencies and frictional costs in the way we have used to trade marine insurance.”
EY Global Insurance Leader Shaun Crawford noted that Insurwave moved from proof of concept to a fully functioning platform in just one year. In September, the group announced it would begin piloting the blockchain in January.
The first phase of Insurwave rollout is focused on marine insurance. EY, Guardtime and Microsoft said they plan to roll it out to other types of business insurance for the marine cargo, global logistics, aviation and energy sectors.
Others have or are also developing blockchain use for insurance in other areas including for certificates of insurance, a crisis coverage registry, captive programs and reinsurance.
*This story ran previously in our sister publication Insurance Journal.