Aon launches blockchain platform for agricultural insurance policies in Sri Lanka

Global re/insurance broker Aon has announced the launch of a blockchain-based platform for agricultural insurance policies for smallholder farmers in Sri Lanka.

The platform has been developed in collaboration with Etherisc, an InsurTech startup developing a protocol for decentralized insurance applications, and Oxfam in Sri Lanka, the organization working to alleviate poverty. Sanasa Insurance, Oxfam in Sri Lanka's partner, has also joined the initiative to provide local expertise, networks and operational execution.

"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. At the heart of our work is a mission to empower economic and human possibility – and that is exactly what we are doing here,” Hugo Wegbrans, the Chief Broking Officer of Europe, Middle East & Africa for Aon, said.

Previously farmers found it difficult to utilize insurance due to a number of factors including the lack of affordable and reliable insurance products and a lack of understanding about how the insurance process works.

The blockchain solution addresses these pain points through the automation of insurance products, which simplifies the claims process by eliminating the need for farmers to submit a claim on one hand, and on the other, the insurer does not need to send a claims adjuster into the field.

This process 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.

"Farmers represent a third of the workforce and account for almost 20 percent of the economy, yet very few have insurance. 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,” Michiel Berende, the Chief Inclusive Officer at Etherisc said.

According to the press release, around 200 farmers have already enrolled in the solution, which aims to deliver micro-insurance to smallholder paddy field farmers in Sri Lanka who are at risk of losing their crops due to extreme weather.