Story from

Powering Parametric Cargo Insurance At Scale With Chainlink

Global air and marine cargo delays and disruptions like the 2021 Suez Canal blockage cost businesses billions of dollars each year. Traditional insurance policies typically only cover a fraction of these losses and come with a costly and time-consuming claims process.

Otonomi is a blockchain-enabled platform that uses Chainlink Data Feeds to execute parametric marine and air cargo insurance smart contracts that adjudicate in minutes instead of days or months and reduce administration costs by up to 90%.

During SmartCon 2022, Otonomi CEO Yann Barbarroux explained how Chainlink oracles permit a powerful paradigm shift within the global cargo insurance industry by introducing speed, transparency, and efficiency to the insurance claims process.

Barbarroux emphasized the urgent need for better insurance among more than 118,000 freight forwarding brokerages and agencies in the U.S. across asset classes such as refrigerated cargo, perishables, live cattle, aviation parts, auto parts, semiconductors, electronics, and event logistics.

“They need delay coverage yesterday,” he said.

He explained how Otonomi’s parametric insurance smart contracts offer a three-step process – event detection, claims activation, and digital payments – made possible by Chainlink. 

“It’s a very critical item in terms of truth generation,” Barbarroux said of Chainlink oracles. 

Because Otonomi’s parametric insurance products are data-driven or index-driven smart contracts that execute automatically and pay out instantly, they require a source of cryptographic truth. 

“Having the certainty that the data or the event trigger that we essentially collect from Chainlink is secure and trustable is a key component to our product strategy and also business strategy,” Barbarroux explained.

Shortly after Otonomi integrated Chainlink to power its initial air cargo insurance policies, Barbarroux told Chainlink Today he views Chainlink as the vehicle for Otonomi’s expansion vertically (e.g. luggage and ticket insurance) and horizontally (e.g. sea cargo insurance and device warranties).

“We believe Chainlink is going to remain our point of contact in order to introduce truth generation in terms of those cargo elements that we want to protect,” he told the audience at SmartCon. “With their power in terms of decentralized oracle networks, we can multiply in scale very fast.”

Watch Otonomi CEO Yann Barbarroux’s presentation at SmartCon 2022.

Read more about

Have an idea for a story?

If you’re interested in submitting content to be considered for publication, please carefully review the Chainlink Today Content Submission Guidelines to help you get started. We’re excited to hear from you.

Related Stories