Keith B. Letourneau and Lauren B. Wilgus
As we previously discussed in our March 2017 issue of Mainbrace, blockchain technology is continuing to prolifer- ate throughout all aspects of industry, including shipping, with Hyundai Merchant Marine (“HMM”) recently completing its first pilot voyage from the South Korean port of Busan to the Chinese port of Qingdao employing blockchain technology. HMM used secure paperless processes from shipment booking to cargo delivery, and assessed the feasibility of employing blockchain-enabled-reefer containers combined with Internet-of-Things (“IoT”) technologies.
Now, blockchain technology is being deployed for the first time in one of the oldest branches of international commerce: the marine insurance sector.
Six industry participants, including AP Moller-Maersk, Microsoft, Acord, MS Amlin, Willis Tower Watson, and XL Catlin, collaborated with Ernst & Young and software security firm Guardtime to launch the world’s first block- chain-based platform for the marine insurance industry.
The new platform, which will go live in 2018, reportedly will include the ability to create and maintain asset data for multiple parties; link data to policy contracts; receive and act upon information that results in pricing or business process changes (employing smart-contract technology); connect client assets, transactions, and payments; and capture and validate up-to-date first notification and loss data. The new platform will be deployed in the marine insurance industry in 2018, before being rolled out to the wider insurance market.
Blockchain technology provides a decentralized ledger system that allows peer-to-peer transactions that bypass centralized intermediaries while securely recording financial transactions across the ledger in multiple places at once. Put simply, it creates an immutable transactional record across multiple organizations and individuals, in a form not subject to tampering. Blockchain will now be used to capture information on individual vessels, global risks, and exposures, and will be integrated into marine insurance policies and contracts.
The proliferation continues.