Today, decentralized insurance startup Etherisc announced that its blockchain project with Aon and Oxfam had made its first payouts. The microinsurance initiative hopes to streamline the claims process for agriculture, by storing policies on public Ethereum and using automation.
Announced in July, the insurance blockchain was built for Sri Lankan farmers to lower costs and effectively cover risk. By automating the claims process based on weather catastrophes, insurer Aon can offer more affordable policies. Today it was revealed that the first payouts were delivered successfully.
“We are proud to have real-world, on-the-ground success from a blockchain solution for microinsurance,” Michiel Berende, Chief Inclusive Officer at Etherisc, said. “We are delighted with the first phase results, and we are excited to drive on and help more farmers.”
The first phase involved 200 paddy farmers at risk of losing crops, who were engaged with through Oxfam in Sri Lanka (OiSL). Etherisc and Aon enabled microinsurance policies to be stored publicly with blockchain and automatically triggered. Rather than a farmer making a claim, claims are submitted for them based on weather data.
This is not only easier for farmers but adds transparency and trust to their agricultural insurance. Previously, insurance was often expensive and unreliable. It was not always clear how farmers would be compensated if they lost crops. With blockchain, these concerns are addressed while reducing costs for all parties.
Today’s announcement also revealed that local insurer Sanasa had joined the project. The firm helped to onboard farmers who lack internet access or computers. However, there is still work to do, as the participants hope to develop offline solutions to be more inclusive.
The other challenges they discovered are a common reliance on cash, which prevents automatic electronic payment, and weather data integrity. The firms are looking to solve these with mobile payments and more weather information sources.
Today, insurance blockchain Vitana by MetLife also lamented the difficulty of data integrity, saying it was harder than setting up the network itself.
Meanwhile, France-based Atos has developed a similar crop insurance solution using weather data, with plans to pilot it in Kenya. UK parametric insurer Skyline Partners was one of the first to build such an initiative, focusing on Indian tea farmers.
Register at Binance