Japanese insurance giant Tokio Marine & Nichido Fire Insurance and NTT Data Corporation have begun testing a blockchain-based "data insurance policy" for the shipping trade.
Trade finance remains largely paper-based, cumbersome and involves many trusted parties; it is proving to be a worthwhile use case for append-only digital shared ledgers, and has seen many banks, logistics companies and technology providers testing the water.
In the Tokio Marine proof-of-concept, a blockchain-based marine cargo insurance certificates is forwarded to the parties concerned with the trade, along with other key shipping documents such as a bill of lading and commercial invoice.
A statement from Tokio Marine & Nichido Fire Insurance, said: "The main stream of shipping documents used in global trading are still based on paper, due to the fact that some of them are negotiable, which leads to the requirement of those documents being genuine, free from electronic disruption or cyber threats.
"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."
Tokio Marine and NTT Data are blazing a trail in blockchain applications for insurance certificates and policies. The insurer said that while this particular PoC is focused on the insurance component of the international trade, its partner, NTT Data is looking at the big picture, with a view to changing the whole international trading system with blockchain technology. In July 2016, NTT Data completed its PoC for a blockchain-based letter of credit.
Other noteworthy shipping and trade blockchain projects have been initiated by R3 and some of its member banks, IBM and Hyperledger and the shipping giant Maersk in association with the IT University of Copenhagen. Meanwhile, blockchain startup Skuchain has been focused on this area for some time and also sees a big picture for supply chains, which it refers to as "collaborative commerce".
Tokio Marine recently scooped an Accenture award for disruptive technology experimentation and innovation for an "auto insurance for autonomous vehicle public road experiment".