Aon, Oxfam, insurtech startup Etherisc launch first blockchain for agricultural insurance in Sri Lanka
Aon, the world’s second-largest insurance broker and a global provider of risk management, insurance and reinsurance brokerage, human resources solutions and outsourcing services, formally announced the launch of the first blockchain-based agricultural insurance policies for smallholder farmers in Sri Lanka.
The project is in collaboration with Oxfam in Sri Lanka, the organization working to alleviate poverty; and Etherisc, the InsurTech startup developing a protocol for decentralized insurance applications. So far, nearly 200 farmers have enrolled in the solution that delivers micro-insurance to smallholder paddy field farmers in Sri Lanka who are at risk of losing their crops due to extreme weather.
“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.”
Historically, there were 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. This new blockchain technology directly addresses those issues as the insurance products are automated. 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.
This coordinated effort announced today includes Oxfam in Sri Lanka which has longstanding expertise in agriculture, deep engagement with the local farmer community and an understanding of the important role of agricultural insurance. Oxfam’s efforts are amplified by Aon’s expertise in reinsurance and global insights as well as 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.
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.”