Accounting giant EY said Wednesday that it plans to launch the first blockchain platform for marine insurance, alongside Microsoft, A.P Moller-Maersk and others.
The distributed ledger will be used to capture information about shipments, risk and liability, and to help firms comply with insurance regulations.
It will also ensure transparency across an interconnected network of clients, brokers, insurers and other third parties.
EY explained that its decision to secure marine insurance data with blockchain was due to a “complete inefficiency” in the sector.
“The reason we chose marine (insurance) as the starting point for this sort of market is mainly because of its complete inefficiency,” Shaun Crawford, global insurance leader at EY, told CNBC via phone earlier this week ahead of the announcement.
Crawford said the industry was “over capacity” and that there was “a lot of cost to it.”
He added: “It’s facing high administrative burdens of managing and writing claims with a lot of paperwork. All contracts are signed multiple times. They go from ship to ship, port to port, through quite a journey.”
Maersk said the blockchain platform would enable the shipping giant to maintain a smoother relationship with the insurance market.
“It is a priority for us to leverage technology to streamline and automate our interaction with the insurance market,” Lars Henneberg, head of risk and insurance at Maersk said in a statement Wednesday.
“Insurance transactions are currently far too tedious and frictional. The distance between risk and capital is simply too far. Blockchain technology has the potential to facilitate the desired development that is long overdue.”
Source: CNBC