Swiss decentralized insurance platform Etherisc, is to support a blockchain-enabled insurance policy product to combat catastrophic weather events like hurricanes in Puerto Rico.
According to a press release last week, the policy will help alleviate the strain of dealing with traditional insurance companies after many small businesses and low-income households suffered delayed claims and payout refusals in the wake of Hurricane Maria.
Etherisc said the policy was developed in just 90 days by local Puerto Rican Ethereum engineers, and represents one of the first real-world use cases of decentralized insurance, demonstrating how its insurance templates can be customized to manage and mitigate risks for communities around the world.
“Six months after Hurricane Maria, many Puerto Rican residents and local business owners are still waiting for their insurance claims to be paid,” said Etherisc Co-Founder Renat Khasanshyn in the statement. “Many have been forced to wait months for claim assessments or payouts. Residents are left without roofs over their homes, without money for repairs, and without a safety net for income loss. As a result, many people have left the island.”
Etherisc said its decentralized insurance protocol removes the need for large, traditional insurance companies to be involved, using a library of automated smart contracts to record transactions in a secure and transparent manner. The technology takes the middleman out of the insurance equation, dramatically reducing the cost of household and small business policies, according to the company. In addition, the protocol automates premium calculations and claims payouts so policies are faster and cheaper than traditional insurance.
“When we were approached by two developers in the country to create a customized policy that would meet the needs of Puerto Rican residents, we saw an incredible opportunity to help the islanders and showcase just what Etherisc and decentralized insurance can do,” said Etherisc Co-Founder Stephan Karpischek in the statement. “By using Etherisc-provided common infrastructure, open-source product templates, and insurance license-as-a-service, they are able to build a tailored policy for Puerto Ricans that was both affordable and accessible, without the huge premiums, delays, and frustrations of traditional insurance. This is exactly what we envisioned for Etherisc – an open protocol for entrepreneurs to collectively build and bring to market truly innovative insurance products.”
The hurricane insurance is also designed as a “parametric insurance,” Etherisc said, meaning it uses a set of predetermined weather parameters to trigger a fixed payout immediately. It added that this type of policy also lowers premium costs, helping to make insurance more affordable for low-income families and small businesses.
Etherisc said the development of its platform is supported by the Decentralized Insurance Foundation in Switzerland, which is also organizing its upcoming Token Generating Event.