Today the Lemonade Foundation announced it would fund the Lemonade Crypto Climate Coalition, which plans to use blockchain and parametric insurance to provide crop insurance for low income farmers. Eight organizations are involved, including the world’s third largest reinsurance firm Hannover Re, the Avalanche blockchain, and Etherisc, which has a track record in similar parametric insurance projects.
According to ISF, less than 3% of farmers in Sub-Saharan countries have crop insurance. A major reason confirmed by ISF studies is it’s just too expensive. To be affordable, the premiums have to be tiny, and in turn, those small premiums cannot justify the cost of processing claims, never mind the insurance itself. Enter automation and parametric insurance.
“Africa has an estimated 300 million smallholder farmers. The majority face real climate risks to their livelihoods, as traditional, indemnity-based insurance is often unaffordable or unavailable to them,” said Rose Goslinga, co-founder of Pula, a Kenya-based insurtech.
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