Sri LankaOxfam, Etherisc and Aon have announced success in the first season of their blockchain-based delivery of microinsurance to smallholder paddy field farmers in Sri Lanka. Oxfam, in Sri Lanka, focuses on alleviating poverty. Etherisc is an InsurTech startup developing a protocol for decentralised insurance applications. Aon is an insurer offering a broad range of risk, retirement and health solutions.

Michiel Berende, Chief Inclusive Officer, Etherisc
Michiel Berende, Chief Inclusive Officer, Etherisc

We are proud to have real-world, on-the-ground success from a blockchain solution for microinsurance,” Michiel Berende, the Chief Inclusive Officer at Etherisc, said.

We are delighted with the first phase results and we are excited to drive on and help more farmers.


Historically, there are major barriers preventing farmers from utilising insurance, including:

  • the lack of affordable and reliable insurance products
  • reduced understanding about how insurance might farmer survival
  • when and how an insurance policy, and any claim, would payout.

Blockchain technology addresses those issues because the insurance process includes automation. This transforms and simplifies the claims process so that:

  • a farmer does not need to submit a claim
  • the insurer does not need to send a claims adjuster into the field.

In addition, the blockchain-based process produces reduced administration costs. In turn, that makes a higher percentage of premiums being used for claims payment and earlier fully trusted pay-out.

This coordinated effort includes:

  • Oxfam in Sri Lanka (OiSL), which has long-standing expertise in agriculture along with deep engagement with the local farmer-community and an understanding of the potential for accessible agricultural insurance
  • Aon’s expertise in reinsurance and a global perspective
  • Etherisc’s knowledge in applying blockchain technology to insurance.

In addition, Sanasa Insurance (OiSL’s partner) joined the initiative to provide:

  • local expertise
  • networks
  • operational execution.

First payouts, challenges and the next phase

After the coordinated launch earlier in 2019 – with 200 farmers enrolled who were at risk of losing their crops due to extreme weather – the system made pay-outs to farmers in the initial operations phase.

The participating companies will now move forward by seeking solutions to some of the challenges identified during the project, with the cropping season starting in November. The main goals of this follow-on phase are to:

  • refine the system’s efficiency
  • scale the number of farmers who will benefit from the microinsurance.

In the first season, the group identified several challenges in the field to be improved on going forward:

  • Many farmers in the area lack electronic devices and Internet access. This means the project may look to provide offline solutions and/or devices through local insurance support from Sanasa, to facilitate registration in the group policy.
  • The project may need to build a network of additional data sources to round out the automated data provided by weather stations.
  • Farmers commonly manage transactions with cash or cheques only. This inhibits the process of automated payouts which, in turn, requires research of additional mobile payment options in Sri Lanka.

Enterprise Times: what does this mean

Previously Enterprise Times wrote: “What intrigues … involves the assertion ‘a farmer does not need to submit a claim (while) the insurer (Aon) does not need to send a claims adjuster out into the field’.

If an event occurs, say a poor monsoon or even an overabundant one (which washes away crops), then all those insured in a devastated area will receive a payout. This would be a radical departure from both insurance practices. It becomes feasible because of blockchain.”

Given the list of the challenges identified (above) after the first payouts, it seems our concern was correct. Yet these challenges are not about the Etherisc blockchain but about in the field (literally) practicalities. Enterprise Times hopes these are resolvable.


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