Smallholder farmers to benefit from blockchain-based insurance

Aon plc provided news on 01 July about a blockchain-based solution which provides a scaled down insurance to smallholder paddy farmers in Sri Lanka.

Aon conveyed that such insurance was to aid farmers who were at risk of losing their crops due to bad weather. Aon highlighted that the solution was the joint endeavor of itself, Oxfam in Sri Lanka and Etherisc. Aon introduced itself as a leading professional services firm providing a broad range of risk, retirement and health solutions. Oxfam is a firm focused on reducing poverty while Etherisc develops a protocol for decentralized insurance applications.

Bojan Kolundzija, the Country Director of Oxfam in Sri Lanka cited – 

“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. 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.”

Aon indicated that nearly 200 farmers had enrolled in the program. The professional services firm highlighted the adversity being faced by farmers with reference to insurance. Aon clarified that such adversities were historical and the present solution aimed at mitigating them. Aon elaborated on the problem as being a lack to avail professional insurance services. Aon also threw light on the lack of understanding that farmers face helping them survive.

Aon conveyed that the insurance was to aid farmers who were at risk of losing their crops due to bad weather.

Aon shared insight into the logistics of the blockchain solution. The services firm added that the decentralized solution is fully automated, directly addresses the problems faced by the farmers. Aon informed that the automation is so effective that farmers do not need to submit a claim. The automation simplifies and transforms this process while also bringing down the administration costs rendering a higher percentage of the premium.

In June, R3 and partnered towards the adoption of blockchain. The partnership was to improve trust in the food supply chain. Ripe Technology conveyed information that the move would be towards digitization and enterprise adoption of blockchain. Ripe Technology added that through this collaboration, the company would make use of R3’s Corda Enterprise and Microsoft Azure.

Aon conveyed a focus on the role of Oxfam. Aon stated that Oxfam has a proven track record in agriculture, deep engagement with the local farming community and understanding of the need for agricultural insurance. Aon asserted that the three firms of the consortium were mutually benefited with Aon sharing its global insights while Etherisc leveraging its expertise to apply blockchain in insurance.