- The partnership seeks to develop a blockchain-based parametric insurance platform.
- Per Etherisc, the project seeks to help up to 250,000 Kenyan farmers insure their crops.
- The blockchain-based system will see farmers insure their crops with premiums as low as £0.37.
Etherisc, a decentralized finance firm has partnered with Chainlink to help Kenyan farmers insure their crops. The organization unveiled this news via a blog post on November 14, noting that this collaboration seeks to develop a blockchain-based parametric crop insurance platform. Per Etherisc, the insurance platform is built on top of its Generic Insurance Framework (GIF), which runs on the Ethereum blockchain and is indexed to local weather parameters.
According to the blog post, Etherisc and Chainlink will work with ACRE Africa, an agriculture microinsurance issuer, to help shield small-scale farmers in Kenya against the effects of climate change. Per Etherisc, Chainlink’s decentralized oracle network will provide a dependable connection to a variety of external data sources securely from end-to-end. Apart from this, the network will play a significant role in broadcasting the obtained data within Etherisc’s smart contract for easy independent verification by all parties.
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In the event of extreme weather events, the blockchain-powered system will leverage the weather information and trigger policies automatically. As a result, the farmers will receive fair, transparent, and timely payouts that are tamper-proof. This will help address issues associated with traditional insurance covers, such as high costs, little trust due to delayed or absent claim payouts, and lack of transparency.
Through this collaboration, Etherisc seeks to deliver sustainable solutions to help protect up to 250,000 Kenyan farmers against the effect of climate change over the next three years. The insurance coverage will only see the farmers part with as little as £0.37 in premiums.
Boosting blockchain adoption in Africa
At scale, Etherisc projects that this program can amass aggregated annual premiums ranging from £4.55 to £7.6 billion. Reportedly, Etherisc will use the grant money to fund several aspects of the project, including developing smart contracts, building an intuitive front-end for farmers to interact with, and integrating with local payment systems, among other technical developments. Apart from funding development, the grant will also help finance studies that relate to the economics of insurance for crops in multiple African countries. In so doing, Etherisc believes it will be better-poised to determine sustainable coverage models for both insurers and farmers.
Commenting on this collaboration, George Kuria, ACRE Africa’s CEO, said,
“We’re excited to be able to further our work with farmers in East Africa by receiving support through the Chainlink Community grant to help build out and implement a more reliable and cost-effective model for crop insurance with the collaboration of Etherisc.”