# Etherisc: Decentralized Insurance in the Real World by Christoph Mussenbrock (Devcon5)

- Channel: [Devcon](https://streameth.org/devcon)
- Date: 2020-10-09
- Duration: 14:12
- Topics: blockchain, smart contracts, distributed ledger, ethereum
- Watch: https://streameth.org/watch/yt-ErFoejiOjxI
- YouTube: https://www.youtube.com/watch?v=ErFoejiOjxI

## Transcript

[Applause] okay everybody and welcome to my lightning talk our interest project in silicon this was part of the kill my friends okay and he contracts on all those talks and projects which are working in the area of social effect and we as interests together with our partners are summon a army has been building crop insurance for smallholder farmers in Salonika i just want to give you an overview on what happens there what are you doing what are the next steps and why it's blockchain is marvelous project so first of all what is my current runs yeah working in this area of my current roles or abusive insurance there are billions of smallholder farmers around the world in most developing countries and these are farmers which mostly have about one or two acres of land this small plot of land will feed the whole family and those people mostly have no access to finance to insurance to banking in the meantime most of them have have a cell phone but probably not a smart phone so no internet access very basic but these people are not a living and it's a very important sector but if something extreme happens and you all know the climate changes and we have more and more climate catastrophes and these climate catastrophes are vital threat to these people and a single thunderstorm can destroy the whole harvest that means for six months that family does not have any income so obviously that is a case on it for insurance and inclusive insurance will cover this but as you can see here on this world map the coverage for four and inclusive insurance is still on a very low level so from the total of 100% coverage which mean everybody has an inclusive in truth we have 8% in Latin America we have 5% in the average in Africa and we have 7% here in the Asian and Oceanian room so plenty of space is a huge potential and all the big insurance companies has all notice that's opportunity for them so they are all trying to write into this but they don't understand the needs of the local people so if you want to change this and this is why we work together not only business trends company but also is an company okusama if most of you know Assam is a company which is dedicated to eliminate the hunger and poverty in the world and they have offices all over the world and they are deeply rooted in the countries and they have a network of local people and that it's exactly the contrast to the insurance which mostly have a nice office in Zurich at the Geneva scene or somewhere and but they are not rooted in the popular countries so why can we do something with blockchain so we try to bridge sunny option of auxin with your opportunities of the insurance company say sure stock is at risk capacity and also is the routing in the country and Oxfam has not penalty which is efficiently enough to cover the needs of these people so this block chain or chain helps to build insurance products which are fully automated which have no human agents or very small amount of your human interactivity and so they are very cheap they can run automatically and because we use blockchain you don't need a super expensive protected IT infrastructure because the security of the system is given by our blockchain smart contract so smart contracts governs our whole process they they implement the whole lifecycle of insurance policy they are data-driven so the as well the input data otama State Product data that is all stolen works same but also if a loss happens or for example a thunderstorm or flood then this data is fed into the contract and then automatically triggers a payout so the payout can be in hours or in minutes people have access to online payment which is not the case but in even if they have only access to cash then we can short the time between the loss and payout some hours or days which is an extreme and improvement so this is what we learned we have now conducted at first sight and say Locka Locka we have two monsoon sessions every year and monsoon means either drought or flood and not it's not evenly distributed but you have some small areas which are flooded and ten kilometres away you have draught so it's a nice case for insurance because insurance always means you need risk which is not affecting everybody because everybody would get a payout and the insurance company would quickly be broken and then you would not have an insurance anymore but here in this case you have some areas which are affected and the truths products and this insurance product has been in the in place for about two years but it's very little usage and because it's inefficient the processes are completely paper-based and we implemented the whole paper-based process now on blockchain and we reduce the time for processing from days to hours or from days to instant processing and that is some huge gain for these people so let me see learnings from the first season we can reduce the time we can implement the huge efficiency but of course they are still some challenges left as I told you most people don't have smartphones don't have internet access and of course they have no idea of blockchain so the worst thing what we can do is hey guys we have a product this blockchain into it because nobody will understand so we of course will have an user interface and in the user interface you want any keys any any nodes or any additional stuff but just a plain user interface and everything connected with blockchain is happening with the background of course the future we plan to implement for example attainments system crypto based payment system and our partner box tom is already experimenting with this in another area of the world in Vanuatu if they are implemented complete payment system where people have phone application and they can pay this crypto is dying in certain stores which are personally prepared they have this machine which can accept die and so people can use seed and fertilize and whatever we try now to combine these challenges paints integrated crypto payment system and for these farmers that means we somehow need to find out how we can distribute devices for them small and simple devices it's maybe even seven between we will use text messages something this are also nice technological challenges the other challenge is whether data process is controlled by automated weather stations and weather stations our distribution of the country transmits the data by our wireless LAN or some mobile cell connection but these stations are still not reliable enough so to use this we need more stations in a smaller network our granularity of these stations and the seconds challenge and the Serbs challenges the onboarding process currently the insurance company still needs to record all the data of the commas and we try to decentralizes that in every village there is some responsible person local organization which records the data and also promotes the product so the truce company can offer the product at a very low fair a lot of challenges and we can also go one step beyond so you cannot only automate all the insurance process but we can also in the second step enable the resistance along the value chain so for example there is an insurance in Sri Lanka and the people who benefit from this insurance in the long term are customers for some literal because they hide by City spice so see the food food companies which is tribute seized goods in Europe in America or elsewhere they have an interest that the farmers have a sustainable production so they are interested at the farmers getting insurance so we get a circle they have people in Europe pay a small amount a part of the price of a certain goods is transferred to the farmer and the premium is reduced by buy this piece of see not surprised and so for the farmers insurance becomes even more affordable that is also a big obstacle that's for this farmers even the kilo insurance premiums are still a relevant factor in their cash flow so we try to reduce them and this missed the whole process of being we need to prove that the three of the money from Europe from the Casa consumers is actually transferred to the insurance premiums and is used to insurance premium and not for something else the same could be word for charity donations it's also assert some project as they collect charity donations and I have not changed the nation is transferred to a certain place where are they as a neat and the whole trends the whole process is transparent and this could also help to reduce the premiums so this is a final picture we have a process where the Tama is protected you have processing of the policy in box chain system we have furniture or business which is connected to the system and which provides the risk very capital and on the lower side we have the value changes and supply chain we are consumers pay and the money goes back to the farmer and helps to pay all the premium but this is something which has really big future we hope that we can roll it out in a larger size next year we are planning the next season with 10 20 or farmers and we are currently applying for a large community together this big insurance company and it was a hell of a on and awesome and this would allow us to bring this to Kenya along you know other countries this very similar system probably the perilous a bit different sometimes some people or some crop is affected not by rain but any of wind hurricanes or other perils pests and so on and so on this will be different but the logic behind will always be the same and of course use the is res gif system is just something like the operating system for insurance so if you want to learn more about this and invites you to our specialized conference d1 cont which we organize concert time this yeah in my tongue and some others very beautiful island and even if you come just to Malta I think it's worse so behind on the table you can have some class and I would like to see all of you in Mata on the fifth and sixth of M bar and discuss and learn and build together with us what new ideas we have also some other projects like Nexus mutual there and this is the day out on the DC side of things so that all is one big community and we are happy to be part of it thank you very much for your time and audience and have a nice time [Applause]