Oxfam in Sri Lanka has announced early success with its blockchain-based microinsurance system in Sri Lanka, revealing the first successful pay-outs to local farmers.
The protocol, implemented in partnership with global professional services firm Aon and blockchain startups Etherisc and InsurTech, leverages the Ethereum blockchain to finalize insurance claims with tokens.
Press materials released yesterday confirm the project, which had 200 registered participants, will now begin its next phase. It’s hoped this will support small-field paddy farmers in the region as they prepare for November’s cropping season.
“We are proud to have real-world, on-the-ground success from a blockchain solution for microinsurance,” said Etherisc exec Michiel Berende. “We are delighted with the first phase results and we are excited to drive on and help more farmers.”
Several challenges identified in the first set of blockchain payouts
Essentially, this endeavour seeks to use blockchain tech to automate the insurance claim process. With the system, it’s hoped farmers will no longer need to submit claims themselves, and simultaneously alleviate insurers from having to send claims adjusters into the field.
This is considered enough to reduce administration costs and help boost insurance payouts.
Etherisc noted participants discovered several challenges in the first stage of the project. For one, many farmers in the area lack the electronic devices and internet access required to register for a blockchain-powered insurance system. As a result, offline solutions and devices appear necessary.
“Second, the project may seek to build a network of additional data sources to round out the automated data provided by weather stations,” said the firm. “Third, farmers commonly manage transactions with cash or cheques only, which inhibits the process of automated payouts, requiring research of mobile payment options.”
Earlier this year, Ethereum co-founder Vitalik Buterin ‘schooled‘ Tesla’s Elon Musk on his project’s ability to automatically finalize blockchain-based insurance claims.