Smart Industry 1/2019

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cost of track-and-trace devices has

the potential to be a major catalyst

for innovation. Battery-powered sensors

on board cargo containers, for

instance, will help the industry home

in on the precise time and cause

of loss events, and will also help to

monitor logistics chains. Developing

enhanced supply-chain interruption

insurance by monitoring upstream

logistics flows, for example, is a major

prize for any commercial insurer.

The advent of 5G networks will also

boost the effectiveness of these sensors,

says Skerret at Trak Global. “Marine

cargo, and areas like that, are

On-vehicle

cameras can

lower insurance

premiums by

30 percent or

more.

Simon Marsh,

managing director

of VisionTrack

begging for better, low-cost, real-time

tracking. With the coming 5G networks

and lower latency, you’ll get

much longer battery life, so we expect

battery-powered IoT location devices

to be a big growth area. Micro tracking

and low-cost telemetry is going to

be incredibly useful,” he predicts.

While there’s a wide expectation in

the industry that IoT will have a major

impact on insurance, there’s much

less clarity about how near-term developments

will play out. “Everyone

can see the future, but the steps from

here to there need careful navigation,”

Skerret concludes.

On the Seas with Blockchain and IoT

■ Riding the Insurwave

Marine hull insurance for shipping dates

back to the sixteenth century when

merchants at Lloyd’s Coffee House in

London began sharing the risks of disastrous

voyages, reducing the financial

damage of a single ill-fated sailing.

Recently, this sector has struggled with

cumbersome and inefficient processes

involving multiple paper trails between

agents, brokers, shipping companies,

and underwriters. High overheads eat

into profits.

One initiative seeking to overhaul this

process is Insurwave, a collaboration

between professional services firm Ernst

& Young, security specialist Guardtime,

the Danish shipping giant Maersk, and

a number of insurers. Built on the Corda

blockchain, Insurwave uses smart

contracts that comprise codified insurance

agreements, automated processes

that include quote generation and

purchasing, and making the data available

to all parties instantly, says Jamie

Steiner, financial services manager at

Guardtime.

“Insurers today don’t have an up-tothe-minute

view of what their risks are,

where the ships are, what the profile is

– they really don’t know about the value

of the cargo that is being transported.

As a result, they have to price their policies

defensively, which takes up more

capital than it would otherwise,” says

Steiner.

Real-time data has been available

from GPS transponders since they

were made mandatory in 2012 for all

marine vessels above 300 tons. This

Insurers don’t

really know

about the value

of the cargo being

transported.

Jamie Steiner,

general manager

for financial services

at Guardtime

On Course to the

Future

Marine insurance

hasn’t changed much

since the days of

Lloyd’s Coffee House

in London, but IoT

and modern blockchain

technology are

making important

inroads.

information is publicly available but few

marine insurers make use of it, even

though knowing a vessel’s position can

be crucial. Through Insurwave, brokers

have access to all this real-time data,

allowing them to account for spikes in

policy prices when, for example, vessels

enter and leave war zones. These additional

premiums can be immediately

encoded into the insurance contract

– automating a process that once relied

on shipping companies sending faxes

to insurers.

Beyond marine hull insurance, the

Insurwave investors plan to address

new business areas to cover all sectors

of commercial insurance. “Marine

insurance has lagged in digitization

and automation but now there is an

opportunity to leapfrog over technologies

that have been around for ten to

15 years,” making it a prime target for

Insurwave, Steiner believes.

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