Smart contract-based insurance is promising, but can it be scaled?
Blockchains can help insure the world's uninsured, but daunting challenges remain: how to explain insurance? harvest to poor farmers?
Analysis
A new world of insurance is coming where smart contracts replace insurance documents, blockchain “oracles” replace claims adjusters, and decentralized autonomous organizations (DAOs) take control of insurance companies traditional. Millions of poor farmers in Africa and Asia will also be eligible for coverage such as crop insurance, where previously they were too poor and too dispersed to justify the cost of underwriting.
>That, in any case, is the vision on display at the recent Smartcon 2022, a two-day conference that aimed to provide "an exclusive preview of the next generation of Web3 innovation".
Subsistence farms, where families live mostly off what they grow and where almost nothing is left over, account for up to two-thirds of the three billion rural people in the developing world, according to the United Nations. They are almost never eligible for insurance coverage and would likely not know what to do if offered.
"In sub-Saharan Africa, for example, where I grew up in Kenya, insurance is virtually unavailable. 3% have access to it, but nobody buys it, basically," explained Roy Confino from the Lemonade Foundation at the two-day event in New York.
The Lemonade Foundation, a non-profit organization founded by US insurer Lemonade, is behind the recent formation of the Lemonade Crypto Climate Coalition, a group that believes that "blockchain has the potential to bring together this risk" and "essentially solving the central problem". it's inhibited the scale of insurance in the developing world for for-profit services and that's a cost,” Confino told Smartcon 2022. Founding members also include Hanover Re, Avalanche, Chainlink, DAOstack, Etherisc, Pula and Tomorrow.io.
>Insurance is problematic in poor countries for many reasons. It cannot be easily distributed because there are virtually no local insurance agents or brokers, and historically insurance is 'sold', not 'bought'. In addition, insurance claims cannot be validated without great expense because, generally, there are no claims adjusters...
Blockchains can help insure the world's uninsured, but daunting challenges remain: how to explain insurance? harvest to poor farmers?
Analysis
A new world of insurance is coming where smart contracts replace insurance documents, blockchain “oracles” replace claims adjusters, and decentralized autonomous organizations (DAOs) take control of insurance companies traditional. Millions of poor farmers in Africa and Asia will also be eligible for coverage such as crop insurance, where previously they were too poor and too dispersed to justify the cost of underwriting.
>That, in any case, is the vision on display at the recent Smartcon 2022, a two-day conference that aimed to provide "an exclusive preview of the next generation of Web3 innovation".
Subsistence farms, where families live mostly off what they grow and where almost nothing is left over, account for up to two-thirds of the three billion rural people in the developing world, according to the United Nations. They are almost never eligible for insurance coverage and would likely not know what to do if offered.
"In sub-Saharan Africa, for example, where I grew up in Kenya, insurance is virtually unavailable. 3% have access to it, but nobody buys it, basically," explained Roy Confino from the Lemonade Foundation at the two-day event in New York.
The Lemonade Foundation, a non-profit organization founded by US insurer Lemonade, is behind the recent formation of the Lemonade Crypto Climate Coalition, a group that believes that "blockchain has the potential to bring together this risk" and "essentially solving the central problem". it's inhibited the scale of insurance in the developing world for for-profit services and that's a cost,” Confino told Smartcon 2022. Founding members also include Hanover Re, Avalanche, Chainlink, DAOstack, Etherisc, Pula and Tomorrow.io.
>Insurance is problematic in poor countries for many reasons. It cannot be easily distributed because there are virtually no local insurance agents or brokers, and historically insurance is 'sold', not 'bought'. In addition, insurance claims cannot be validated without great expense because, generally, there are no claims adjusters...
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