The next generation of insurance
IBISA caters to the next generation of insurance. It is a mutual risk-sharing service designed to solve the uninsurability of smallholder farmers and pastoralists in the world. IBISA is a platform built on a decentralised mutuality-based system that enables the sharing of farmer-to-farmer risks in a transparent and cost-efficient way, harnessing the use of blockchain, satellite earth observation data and index-based risk modelling. The simple act of getting together, joining hands, sharing resources, risks and needs, unleashes the potential of ‘mutuality’. In this way, smallholder farmers all over the world can be granted access to a risk sharing mechanism that protects them from falling back into poverty after a climate related disaster such as drought or excessive rain.
IBISA is a B2B platform on which local partners globally on-board farmers in the mutual community to share their weather-related risks. IBISA uses blockchain as a trust machine and as a means to lower admin and operational costs. Besides, satellite data is being used to scale up damage assessment without using ‘ground truth’. The platform automates monthly assessment and pay-outs, removing the need of filling claims and providing timely compensation. IBISA is scaling in India and is being piloted in Niger.
For the first time, blockchain and Satellite Earth Observation (EO) technologies enable profitable agriculture crop insurance products. They hold the potential to drastically reduce costs that are typically incurred by traditional insurer-centric paradigms. IBISA re-engineers the business process and business model to drastically reduce costs and enhance resiliency and transparency. We use blockchain to automate maximum of back-office, to mutualise risk in a decentralised way and to enhance transparency. Besides, blockchain is being used to spread operating costs between stakeholders instead of concentrating them, and to put in place transparent governance for stakeholder management.
Contributing to the SDG’s
New ways of insuring will improve food security by stabilising a household’s income after shocks. Moreover, timely and automated payments will in some cases enable farmers to invest in a second sowing, still leading to a successful harvest. In this way local food production is stimulated. This immediate payment improves lending opportunities and encourages follow-on investments in agriculture. IBISA provides a safety net and breaks the vicious cycle that keeps farming families in perpetual poverty. Because the fees of insurances are low and the assessment is fast, the farmers will have money in their pocket to recover from setbacks, re-invest in their crops and feed their family.
Climate change brings about major risks for farmers exposed to drought or excessive rainfall. It is important that investments are made, also by smallholder farmers, to cope with the effects, such as a shift to drought resistant crops and fruit trees, drip irrigation, etcetera. However, these investments need to be protected. If not, farming communities will be forced to abandon lands that are more sensitive to climate change, and an abandoned farm is one that succumbs quickly to desertification or erosion. IBISA mitigates the financial effects of extreme weather events, and strengthens resilience, therefore allowing farmers to stay in their ancestral lands. This is a key frontline in the fight against climate change.
Want to learn how blockchain can help farmers build up a digital identity and regain ownership of their data? Download CTA and Fairfood’s info sheet: