Aon plc has partnered with anti-poverty organization Oxfam and insurtech startup Etherisc to launch a blockchain-based platform that provides agriculture insurance for smallholder farmers in Sri Lanka.
Nearly 200 Sri Lankan farmers have enrolled to obtain micro-insurance protection against crop losses due to extreme weather.
Historically, there have been major barriers preventing farmers from utilizing insurance, including the lack of affordable and reliable insurance products, a lack of understanding about how insurance would help a farmer survive, and when and how a claim would be paid, said Aon in a statement.
This new blockchain technology, developed by Etherisc, addresses those issues by providing automated insurance products, Aon explained.
This automation transforms and simplifies the claims process so that a farmer does not need to submit a claim, and, at the same time, the insurer does not need to send a claims adjuster into the field. In addition, this process results in reduced administration costs and, subsequently, a higher percent of premiums being used for claims payment and immediate, fully trusted pay-out, Aon continued.
This coordinated effort benefits from Oxfam’s expertise in agriculture and engagement with the local farmer community, as well as Aon’s expertise in reinsurance and Etherisc’s knowledge in applying blockchain technology to insurance.
Sanasa Insurance, Oxfam in Sri Lanka’s partner, has joined the initiative to provide local expertise, networks and operational execution.
“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.”
Hugo Wegbrans, the global chief broking officer 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.”
Michiel Berende, the 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.”
Photo credit: AP photograph taken by Eranga Jayawardena. On Wednesday, Oct. 29, 2014, a mudslide was triggered by monsoon rains at the Koslanda tea plantation in Sri Lanka’s Badulla district, about 140 miles east of Colombo. At least 10 people were killed with scores missing.
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