The Japanese insurance company Tokio Marine & Nichido Fire Insurance and NTT Data Corporation decided to test an innovative blockchain-based “data insurance policy” for shipping trade.
The idea consists on a blockchain- based cargo insurance certificate that is forwarded to the parties related to the trade, along with other shipping documents such as the bill of lading and commercial invoice.
Blockchain is a technology that allows digital information to be distributed but not copied or corrupted.
According to technology futurist and author Ian Khan: “The most critical area where Blockchain helps is to guarantee the validity of a transaction by recording it not only on a main register but a connected distributed system of registers, all of which are connected through a secure validation.”
Tokio Marine & Nichido Fire Insurance said in a statement that trade finance has remained as a paper-based process, as some shipping documents are negotiable, which requires the documents to be genuine, free from electronic disruption or cyber threats.
However, the Japanese firm says that blockchain technology is secure enough to keep the documents safe:
“A major advantage of using blockchain technology is security. It is considered impossible to rewrite or alter the data contained within the blockchain, which turns out to be a highly reliable technology for important documents. Needless to say, another advantage is the reduction in time for sending and receiving paper documents, as well as a reduction in costs.”
Meanwhile, NTT Data is looking to change not only the insurance component of international trade but also the whole system with the support of blockchain technology. According to International Business Times, in July 2016, NTT Data completed its PoC for a blockchain-based letter of credit.
R3, IBM, and Hyperledger, and the Danish shipping line Maersk with the IT University of Copenhagen have initiated other blockchain projects that are connected to the shipping industry.
Tokio Marine has also recently scooped an Accenture award for disruptive technology experimentation and innovation for an “auto insurance for autonomous vehicle public road experiment”.