The solution gives Oxfam and its partners an automated index insurance product that is low cost with a higher percentage of premiums catering for claims payment and immediate pay-out.
“We have been able to establish a solid base to support farmers in Sri Lanka. We have been educating the farmers, building trust and creating lasting solutions. This advancement is significant as we are now able to expand our reach by applying the latest technology available, which should also allow us to deliver more real and lasting results,” said Bojan Kolundzija, country director, Oxfam.
The new blockchain solution will allow farmers to access affordable and reliable insurance products by making the claims process simpler. According to the press announcement, the solution removes the need for the farmer to submit a claim and the insurer to send a claims adjuster to the field -- two key issues that were barriers to microinsurance uptake in rural areas.
“By bringing micro-insurance, with very small premiums, to the hard-working paddy field rice farmers, we are empowering economic and human possibility,” said Hugo Wegbrans, chief broking officer Europe, Middle East and Africa, Aon.
“This is not about making traditional insurance smaller, this is about empowering farmers to manage risk in order to thrive and helping them to recover when they face adversity,” he added.
Access to microinsurance will help farmers to weather irregular crop cycles and raise themselves out of poverty. It also prevents them from falling prey to unregulated moneylending risks.
“For low-income households, a loss event is a particularly delicate and difficult time, and they need a claims process that is fast, simple and clearly understood. With blockchain technology a payment can be made immediately, eliminating the need, in some circumstances, for farmers without access to traditional regulated loan facilities to go to a moneylender or loan shark. Payment triggers will be mutually agreed upon and monitored by external data providers where blockchain makes that data more secure and reliable,” said Michiel Berende, Inclusive Insurance Lead, Etherisc.