Blockchain is a chain of connected blocks that records every transaction among network participants. Unlike traditional databases, these records cannot be altered or erased; new entries can be added only. Smart contracts are embedded in blockchain code, acting as programs that run automatically when agreed conditions are met.
Blockchain records are stored by many independent users across the network. Each new piece of information is placed into a fresh block and sent to every node. This ensures all participants hold the same data, removing the need for a central verifier. The disclosure of participant details and transaction data depends on the network’s rules. Sensitive information can be encrypted to protect privacy and security.
In cargo insurance, insurers, carriers, freight brokers, and cargo owners all participate, among others. The process is intricate and highly interconnected, so transparency and speed in transactions are crucial. Blockchain principles offer solutions to these challenges. Analysts project the global insurance blockchain market will grow at an impressive pace, reaching around 32 billion dollars by 2031 with an average annual growth rate of about 52.4 percent, according to Allied Market Research.
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Back in 2018 the Tsunami-flow cargo insurance platform emerged in the Russian market. Developed by the Kaliningrad IT firm Innoseti, it stands as the largest blockchain-based cargo insurance network in Russia, currently used by eight of the country’s fifteen largest insurers.
The platform’s popularity stems from several competitive advantages. Foremost is speed: blockchain participants exchange information directly, cutting down processing times dramatically. Transactions can be conducted swiftly on the network, documents can be exchanged, and insured events can be paid promptly. Tsunami handles more than 100 transactions per second, and the majority of applications move from registration to payout decision in about three minutes.
Security is another key factor. Blockchain preserves the immutability of critical parameters in smart contracts among three or more parties, fostering trust and transparency. Conditions and calculations are written into the smart contracts rather than the insurer’s internal systems, so customers can trust that processes are coordinated and payouts are reliable. Data on the network is organized and digitized by default, enabling analytics on core business processes. For instance, Tsunami has built an animated dashboard for insurers and their clients that highlights essential metrics for immediate analysis and informed decision-making about working with customers.
Blockchain also enables the recording of any agreed condition by all participants, allowing for bespoke solutions. This technology has spurred new insurance models such as per-minute and peer-to-peer mutual insurance and automated insurance using external data. An example is Innoseti’s CASCO policy feature at gas stations: when a vehicle is refueled, data feeds into the system, the smart contract triggers, and coverage activates for a defined period based on fuel consumption data.
Cargo insurance is known for its complex workflows and a historically high level of mistrust between participants. Blockchain helps address these issues by offering a transparent and secure framework for collaboration. It accelerates information exchange, enhances safety, and improves efficiency. The integration of blockchain into cargo insurance is reshaping business models and participant behavior. Yet the technology remains relatively young, and many innovative blockchain-based solutions and products are still on the horizon.