Aon, a global professional services firm providing a broad range of risk, retirement and health solutions, has launched a blockchain platform for agricultural insurance policies for smallholder farmers in Sri Lanka.
The blockchain platform, which has been developed in partnership with Oxfam in Sri Lanka and InsurTech startup Etherisc, will reportedly deliver micro-insurance to smallholder paddy field farmers in Sri Lanka who are at risk of losing their crops due to extreme weather. The platform will automate the insurance products to directly address major barriers that prevent 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.
“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,” said Hugo Wegbrans, the Chief Broking Officer of Europe, Middle East & Africa for Aon. “At the heart of our work is a mission to empower economic and human possibility – and that is exactly what we are doing here.”
According to the firms, blockchain’s ability to automate the insurance products eliminates the need for farmers to submit a claim, and, at the same time, the insurer does not need to send a claims adjuster into the field.
“Farmers represent a third of the workforce and account for almost 20 percent 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 decentralized, collaborative and automated insurance. This alliance is really a cooperation between all and showcases blockchain for social good.”
In addition to simplifying the claims process, the blockchain platform will also help reduce administration costs and, subsequently, a higher percentage of premiums will be used for claims payment and immediate, fully trusted pay-out.
“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,” said Bojan Kolundzija, the Country Director of Oxfam in Sri Lanka.
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