Shipping giant Maersk will add Miller and JLT Specialty to its broker line-up in 2019, as the conglomerate becomes the first client to incorporate blockchain into its insurance buying.
Miller will run a reinsurance solution for a new captive set up by Maersk in July 2019. Meanwhile, JLT Specialty has won a global risk advisory mandate for the shipping line.
The two brokers were appointed in August after a three-month tender process, sources said.
New contracts issued to JLT and Miller state the brokers must use the blockchain-enabled Insurwave platform where possible.
Willis Towers Watson took an 85 percent stake in Miller in 2015. Willis has a long-running broking relationship with Maersk.
Changes to Maersk’s insurance buying comes as the shipping and logistics giant seeks to cut the amount it spends on insurance premiums and broker fees.
Marine sources speaking to this publication drew parallels with BP’s use of captives to insure risk instead of turning to the insurance market.
“A company like Maersk has so much capital sloshing around it makes sense to redeploy it rather than pay out on insurance premiums,” a source said. “We may be in a soft market, but it is all relative.”
Energy company BP spends relatively little on insurance because it operates a Guernsey-based captive called Jupiter with a capital base of approximately $6.5bn.
The captive does not purchase any external reinsurance cover and has a maximum line size of $1.5bn.
The Insurance Insider understands that Maersk has sought to pursue a similar strategy using the Insurwave marine blockchain project.
The initiative, launched in May this year, allows Maersk to track the movement of its assets, implement smart insurance contracts, and cut costs.
Insurwave also allows the shipping giant to offer insurance contracts directly to its cargo clients.
Sources added this was part of a move by Maersk to reduce the role of the broker in its insurance buying programme.
Speaking at the launch of the consortium in May this year, Lars Henneberg, head of risk and insurance at AP Møller-Maersk, said the platform would help the firm automate manual processes and cut costs by removing a range of inefficiencies and “frictional costs”.
Insurwave won the ‘InsurTech Honour of the year’ at The Insurance Insider’s Honours last week.
The project is a joint venture between consultancy EY and software company Guardtime and allows shipping giant Maersk to monitor the changing risk exposure of their assets around the globe in real time.
Xl Catlin, MS Amlin and Willis Towers Watson are also using the platform.
The project is built on an open-source distributed ledger system first designed by tech firm R3.
Distributed ledgers are well-suited to tracking the movement of physical marine assets such as ships and containers because they offer multiple parties an indelible and transparent record of real-time changes.
Maersk and Willis Towers Watson declined to comment. JLT Specialty did not respond to a request for comment.