Sri Lanka Blockchain for Agricultural Insurance

Sri Lanka Blockchain for Agricultural Insurance

Aon plc, the leading global professional services firm, in collaboration with Etherisc, Oxfam and InsurTech, unveiled a blockchain-based platform for the provision of agricultural insurance policies for smallholder paddy field farmers in Sri Lanka.

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With the involvement of about 200 farmers in the same, the new solution comes as a blessing to deliver micro-insurances to sustain the risk of losing crops due to the prevalence of extreme weather, as per the report.

Hugo Wegbrans, the Chief Broking Officer of Europe, Middle East & Africa for 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.”

Farmers previously faced a lack of cost-effective and authentic insurance products, insufficient knowledge about the mechanism and ignorance of the claiming procedures. Blockchain technology will be used to address these issues through automated insurance products. Per the report, the automation will dumb down the complex claim procedure to facilitate the elimination of the need for the farmer to submit the claim and for the insurer to send a claims adjuster to the field. This will cut down on administration costs, paving the way for an increase in the percentage of premiums for claim payments as well as assured quick pay-outs.

Etherisc provides a decentralized insurance protocol to increase transparency and facilitate access to reinsurance investments. Michiel Berende, Chief Inclusive Officer at Etherisc, said:

“Farmers represent a third of the workforce and account for almost 20 percent of the economy, yet very few have insurance. This made Sri Lanka a perfect candidate to feel the benefits of decentralized, collaborative and automated insurance. This alliance is really a cooperation between all and showcases blockchain for social good.”

Oxfam in Sri Lanka (OiSL) is an organization that provides long-lasting solutions for economic development with a cross-cutting theme of peacebuilding and conflict transformation. Bojan Kolundzija, the Country Director of Oxfam in Sri Lanka, said that the launch of the blockchain platform marks an important milestone in establishing an affordable, minimal risk mechanism for the greater benefit of a large portion of the Sri Lankan economy.

The crypto insurance industry has been expanding with the leading insurers such as Marsh & McLennan and Aon extending blockchain startup services to cater to the specific requirements of crypto protection. With the increase in demand for crypto premiums, insurers are perhaps driven towards low-cost services compared to the traditional counterparts.

Sri Lanka Blockchain for Agricultural Insurance