Tag Archives: risks

Insurwave

A blockchain for $30 billion marine insurance is currently in use. Shipping has always been in the business of taking risks.  Furthermore, there are four types of risks that require marine insurance. Hull and machinery of the vessel itself. The container boxes on the ship. The cargo that is inside the container. In addition all the liabilities that you can incur as shipowner. These include pollution, damage to cargo as well as injuries to the crew. Insurwave is a blockchain platform which supports marine hull insurance. Businesses across the world are able to use the platform to manage risk across their organisation.

The system that has been used until now, tied up too many resources for the customers of marine insurance. It took up 75% of their time on insurance contract administration and 25% on risk management. Insurwave is changing this situation.

Insurwave is a joint venture between EY and developer Guardtime. They are using distributed ledger technologies developed by Microsoft Azure infrastructure. The risk for more than 1000 commercial vessels has been managed in the first year.

This is a digital insurance value chain. Participants are connected in a private network to a shared database in real time. Transactions that usually take days can be processed in minutes using computer algorithms. There is no need for third party verification.

The head of risk and insurance for AP Moller-Maersk said that moving to the platform has reduced inefficiencies for the company. They own 350 container vessels worldwide. This technology will support more than 500,000 transactions in the first year.

Ultimately through the use of IoT and smart contracts, policies will be updated automatically to reflect the risks covered. This combination of technologies will thus help improve efficiency in claims assessment and payment.

Unmanned Cargo Ships

The thought of unmanned cargo ships sounds like a ghost story. Wrong! This is actually the future of shipping.

Rolls Royce is working with groups backed by governments across northern Europe. Rolls Royce aims to launch crewless ships by 2020.

Sea transport costs could thus be cut by about 20%.

Major shipping firms are expected to adopt this technology hoping that it will boost profits.

The U. S. Coast Guard estimated that human error is responsible for about 96 percent of all marine casualties. Piracy is a reality so crews remain vulnerable. Furthermore there is a shortage of skilled workers who want a career at sea.

44 per cent of a ship’s costs is made up of carrying sailors. This includes not only salaries but crews’ quarters and air-conditioning units. Other amenities take up space which could be used for cargo.

25 per cent of greenhouse gas emissions are a result of maritime shipping. Rolls Royce predicts that unmanned cargo ships will be 5 per cent lighter and burn 15 per cent less fuel.

Unmanned cargo ships will therefore present challenges for insurers. They will have to consider new types of risks. The demand for guards protecting ships from piracy will be reduced. This is an industry that has been booming in the last few years. However, there would be a need for increased cyber security insurance.

Marine insurers have approximately 5 years to work out the costs of covering unmanned cargo  ships for risks that can occur at sea. Without historical data to fall back on will complicate the process of underwriting the risks of unmanned ships.

A drone vessel that is being operated remotely from onshore will create unique challenges. These threats include pirates, a fire at sea and the time it takes to reach a ship if a computer malfunctions. There would n’t be anyone if there was a breakdown. Help for a ship in the Atlantic could be done in one week, but in the Pacific that would take a three week voyage.