Links of a chain
Blockchain, as the name suggests, is a chain of interconnected blocks. It contains all transaction records between network participants. Unlike classical databases, these records cannot be changed or deleted, only new ones can be added. Smart contracts can be written into blockchain code, which are programs that run automatically when established agreements are followed.
Blockchain records are stored simultaneously by many independent users. Incoming information is placed in a new block and distributed to each node in the network. Therefore, all participants have the same information and there is no need to contact a single center for verification. At the same time, the degree of disclosure of information about participants and transactions is determined by network rules. Sensitive information can be encrypted to protect sensitive data.
Insurers, carriers, freight brokers, cargo owners, etc. This is the reason why technology is in such demand in cargo insurance, which includes many parties. The interaction processes between them are complex and branched, so it is very important that transactions are transparent and communication is fast. The principles on which the blockchain works help solve these problems. according to analysts Allied Market ResearchThe global insurance blockchain market will grow an average of 52.4% annually and reach $32 billion by 2031.
high technology
In 2018, the Tsunami-flow cargo insurance platform appeared on the Russian market. The solution, currently developed by Kaliningrad IT company Innoseti, is the largest transaction network on the blockchain for cargo insurance in Russia, and the solution is used by 8 of the 15 largest insurers.
The popularity of the system is due to a number of competitive advantages it provides to its users. First of all, this is speed – blockchain participants directly exchange information, which reduces the time required for processing messages. Therefore, you can quickly transact on the blockchain, exchange documents and pay for insured events. For example, “Tsunami” processes more than 100 transactions per second, and the time required to review an application from registration to a decision to pay for a substantial portion is only 3 minutes.
The second important aspect is security. Unlike traditional insurance, blockchain allows recording and guaranteeing the immutability of many parameters of a smart contract between three or more parties, which allows trust and guarantees transparency. This means that insurance information cannot be changed unilaterally or written retrospectively. Since the conditions and calculations are written in smart contracts and not in the company’s internal system, the client is confident that the processes are coordinated and the insurance will work.
Information in the blockchain network is systematized and digitized by default. This allows you to collect and process analytics on the company’s core business processes. For example, Tsunami has created an animated dashboard for insurance companies and their customers that displays key metrics for immediate analysis and helps insurance companies make business decisions about working with their customers.
Also, any condition accepted by the parties can be recorded on the blockchain. This allows you to create unique solutions. Thanks to the blockchain, new forms and models of insurance began to emerge, such as per-minute and p2p insurance (mutual insurance) or insurance automation using external data. An example of such a product is another development of Innoseti – the issue of a CASCO policy at a gas station when paying for fuel. When the insured’s vehicle is refueled, the data is automatically entered into the system, the smart contract is triggered, and the insurance activates for a certain period of time according to the vehicle’s fuel consumption data.
Cargo insurance is distinguished by the complexity of processes and a high level of distrust of participants towards each other. Blockchain technology solves this problem and offers a new transparent form for interaction between participants in transactions. Blockchain speeds up information exchange processes, making them safe and efficient. The penetration of technology into cargo insurance is changing business models and the behavior of market participants. However, this is a relatively young technology and we have yet to see many innovative solutions and products based on blockchain.