LONDON — Aon, one of the world’s largest insurance companies, has teamed up with respected charity Oxfam and blockchain start-up Etherisc to deliver blockchain crop insurance policies to small farmers in Sri Lanka.
The group’s revolutionary system recognizes the lack of sophistication with insurance in emerging markets. Farmers don’t have to submit claims, and insurers don’t need to train adjusters to administer the policies.
Instead blockchain smart contracts automate the process. Robotic weather stations record the amount of rain falling on farms. In the event of extreme levels, claims will be triggered automatically.
With traditional policies, an agent from the insurance company would need to travel to the area affected by the floods or droughts. Automation not only reduces the cost, but the time taken to authorize claims.
Getting cash in hand quickly means farmers rebuild far faster after disasters. Often in emerging markets, it can take farmers years to get back on their feet while they work to rebuild enough capital to buy seed or livestock.
200 farmers have already signed-up to use the Ethereum-based application.
It’s just one of several blockchain based projects Oxfam has underway. Oxfam already uses blockchain to help Cambodian farmers find buyers and get better prices. It’s also developing OxChain, a system to make charitable giving more accountable and transparent.