A blockchain-based insurance platform launched today will provide farmers in Sri Lanka with agricultural insurance cover in the event of their crops being damaged by extreme weather.
The platform is a result of a collaboration between Oxfam in Sri Lanka, professional services firm Aon and insurtech startup Etherisc.
Automated weather stations will measure levels of rainfall on the farms and automatically trigger the claims process when rainfall passes above or falls below a certain threshold.
This, say the collaborating parties, will eradicate the need for a claims handler to travel to the field to verify the claim. The improved efficiencies that come with automating processes are expected to keep administrative costs down.
“Oxfam in Sri Lanka expertise in climate-smart agriculture and our long-standing engagement with farmer communities, provides us with in-depth knowledge about the opportunities and challenges that farmers have to climate and weather events,” said Bojan Kolundzija, the country director of Oxfam in Sri Lanka.
“Allowing farmers to access the blockchain platform is an important milestone that is bringing an effective and affordable risk transfer mechanism to a large portion of the Sri Lanka economy.”
Blockchain-based insurance platform gains early interest
Nearly 200 farmers have already enrolled on the blockchain-based insurance platform, which runs on the Ethereum blockchain. They can access it via a smartphone, tablet, desktop or laptop with an internet connection.
It will allow them to see a full audit trail of claims. This, and the fact that the distributed database cannot be modified by a single party, will provide a so-called ‘single source of truth’ and ensure that all participants act according to the agreed-upon terms.
In short – both the farmers and insurance provider will have access to the same data and be able to verify if it is accurate by looking at the immutable audit trail.
“Farmers represent a third of the workforce and account for almost 20% of the economy, yet very few have insurance,” said Michiel Berende, the chief inclusive officer at Etherisc. “This made Sri Lanka a perfect candidate to feel the benefits of decentralised, collaborative and automated insurance. This alliance is really a cooperation between all and showcases blockchain for social good.”
Hugo Wegbrans, the chief broking officer Europe, Middle East & Africa of Aon, said: “Strong collaboration, such as this initiative with Oxfam and Etherisc, allows us to broaden the potential positive impact we can have on people, families and small businesses around the globe. At the heart of our work is a mission to empower economic and human possibility – and that is exactly what we are doing here.”