Accounting multinational EY announced on Wednesday that it will develop a new marine insurance platform based on blockchain, in partnership with Microsoft and shipping giant Moller-Maersk.
The platform will be designed to capture and manage data relating to risk and liability, assisting companies that need to adhere to strict insurance regulations.
EY will be working with Microsoft Azure and blockchain startup Guardtime to build the new platform, and will be deploying it for use with insurance firms ACORD and XL Catlin.
Blockchain provides a distributed ledger that's able to record data transactions and share them across multiple locations. These records are immutable, incredibly secure and entirely decentralised, so there are no middle men slowing the data sharing process down.
"The reason we chose marine (insurance) as the starting point for this sort of market is mainly because of its complete inefficiency," said Shaun Crawford, global insurance leader at EY, speaking to CNBC.
Crawford, added that the industry was struggling to handle the vast amounts of data being generated from shipping lanes, and incurring substantial costs as a result.
"It's facing high administrative burdens of managing and writing claims with a lot of paperwork," added Crawford. "All contracts are signed multiple times. They go from ship to ship, port to port, through quite a journey."
Following a successful trial earlier in the year, the technology is due to be implemented in full in 2018.
Shipping represents yet another industry taking advantage of the disruptive software approach, particularly as the gathering of data can be automated through IoT trackers. The hope is that by using blockchain, companies will be able to drastically reduce the amount of paperwork and active management of insurance contracts, which typically require human interaction.
"This solution is truly unique given the depth and breadth of capabilities, and will have a significant impact across a wide range of insurance products and services," said ACORD president and CEO Bill Pieroni, in a statement.
"The initial solution is focused on the $200 billion global marine industry and, given the use of ACORD assets, will be readily extended to additional lines of business and industries."
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