Etherisc, a decentralized insurance platform for collectively building insurance products, has today announced its support for the first blockchain-enabled insurance product to combat catastrophic weather events in Puerto Rico.
The hurricane insurance policy on Etherisc’s blockchain platform will help to alleviate the strain of dealing with traditional insurance companies after many small businesses and low-income households hit hard by Hurricane Maria experienced delayed claims and refusals to pay out policies.
Developed in just 90 days by local Ethereum engineers, the policy will enable one of the first real-world use cases of decentralized insurance and demonstrates how Etherisc-based insurance templates can be customized to manage and mitigate risks for communities around the world.
Etherisc Co-Founder Renat Khasanshyn said: “Six months after Hurricane Maria, many Puerto Rican residents and local business owners are still waiting for their insurance claims to be paid. 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’s 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. In addition, the protocol automates premium calculations and claims payouts so policies are faster and cheaper than traditional insurance.
Etherisc Co-Founder Stephan Karpischek said: “Only half of all Puerto Rican households are covered by policies that protect against wind damage. 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.
“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. 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,” meaning it uses a set of predetermined weather parameters to trigger a fixed payout immediately. This type of policy also lowers premium costs, helping to make insurance more affordable for low-income families and small businesses.
“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. 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,” added Co-Founder Stephan Karpischek.