How the Blockchain is Reducing Risk in Marine Insurance

Blockchain technology has the ability to transform the insurance industry with fast, verifiable data exchanges and greater transparency. That’s great news for marine insurers and shippers, which suffer from the unpredictability of the weather and expensive guesswork. The benefits of blockchain technology in reducing risks for marine insurance include:

  • Better Documentation
Blockchain impacts shipping by providing electronic documentation of cargo manifests, inventory lists and detailed records of the disposition of cargo.

  • Automation for Reporting
Automating reports of regulatory compliance brings a new level of transparency, efficiency and traceability for reporting.

  • Faster Response Times
Administrators can receive information almost instantly about any missing materials or damaged cargo and act accordingly to minimize any disruptions.

  • Stronger Connections
All actions and interactions are thoroughly confirmed to connect clients with assets, payments and other transactions.

  • Data Validation
Validating the cargo keeps shipping manifests up-to-date, and it makes it easier to pinpoint the sources of discrepancies.

  • Building Greater Trust
Blockchain tech creates near-universal visibility and transparency, which increases trust between mainstream companies and outlier suppliers without an extensive track record.

  • Value-Added Services
Greater transparency makes it possible to offer a variety of value-added services, which can be recommended, confirmed and monitored.

  • Innovative New Value Chain
The innovations -- and disruptions of the status quo -- that blockchain creates to make data more visible is probably more revolutionary than cryptocurrency. Distributed ledgers can document every process and open up a new value chain based on personal interactions and superior customer service.

  • Better Underwriting
Insurance companies stand to benefit tremendously from more accurate premium prices, smarter underwriting and faster claims processing. Companies also can eliminate duplicate efforts, improve automation and reduce the red tape and paperwork of administration.

Blockchain and Indirect Tax Considerations

Professionals in all fields are considering blockchain applications to streamline their businesses and manage indirect taxes. Questions that arise include the following:

  • Can blockchain remove the need for invoices?
  • Will greater transparency result in customs declarations being filed by container ships instead of customs brokers?
  • Might government taxing authorities use cryptos to collect and refund value-added taxes, known as VAT?
  • Can companies automate indirect tax calculations?
  • Can businesses integrate indirect taxes with other accounting systems?

Shipping Companies Can Reduce Insurance Premiums

The final analysis of blockchain technology rests on the potential savings in insurance premiums. Insurance companies insure shippers for hundreds of millions of dollars each year, and blockchain tech can radically transform the industry by making it possible to streamline premiums and expedite claims processes for big savings. Securing streams of data prevents all types of insurance fraud and ensures a more shipper-friendly environment for global trade.

Underwriting Simplicity

Blockchain offers many ways for shippers -- and insurance companies -- to save money on administration, fraud and theft prevention and reductions in maritime risks. Find out more about okx markets and prices to realize how blockchain technology can reduce maritime risks. It’s easy to appreciate the benefits of updating classic marine insurance with beneficial blockchain technology.

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