Decentralized insurance platform Etherisc has developed a blockchain insurance product that will provide hurricane damage cover for the residents of Puerto Rico.
The need for a decentralized policy to cover natural disasters arose from the many small businesses and low-income households that were hit by Hurricane Maria and experienced delayed claims and refusals to pay out policies from traditional insurance companies.
“Only half of all Puerto Rican households are covered by policies that protect against wind damage,” Etherisc Co-Founder Stephan Karpischek said in a statement. “This is particularly alarming when we consider how often the country is battered by catastrophic storms. Such events have far-reaching socioeconomic consequences, with Puerto Rico faced with the devastating loss of an estimated 470,000 residents as a direct result of Hurricane Maria alone.”
Developed in just 90 days by ethereum engineers, Etherisc’s hurricane insurance policy will remove the need to deal with traditional insurers, using a library of automated smart contracts to record transactions in a secure and transparent manner. By eliminating the need for a third party, the technology would reduce the cost of household and small business policies. The hurricane insurance policy also automates premium calculations and claims payouts so policies are faster and cheaper than traditional insurance.
The blockchain insurance product is also designed as a “parametric insurance,” meaning it uses a set of predetermined weather parameters to trigger a fixed payout immediately.
“It’s inspiring to see the Etherisc platform already being used in a way that will have life-changing impacts for people who traditionally struggle with brick and mortar institutions, or simply cannot afford to protect themselves,” Karpischek said. “The hurricane insurance is the first use case that embodies our belief in what insurance should achieve – helping people solve real problems and manage risks in their communities.”
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