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If you look at the farm level, at the bottom of the supply chain, you will find more often than not it is women running the business of farming.”

Ciara Jackson Aon Enterprise Client Leader, EMEA Food Agribusiness and Beverage Industry Vertical Leader

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Microinsurance can be part of last mile solutions and can be especially effective in giving businesses in developing regions better access to capital and risk management to build resilience. While typically featuring low margins, if made available to large numbers of people, the accumulated revenue (and resilience benefits) can be substantial. In microinsurance, administration costs can be kept down due to limited underwriting at the policy inception stage and efficient claim payment processes; and the strategy can also have significant reputational benefits if done well. A long-term perspective toward the business value for the entire supply chain really paints the picture of how microinsurance can be profitable.”

Neha Bhambhani Co-founder, Resilience Domain, Munich Re Member of WiCT+ who participated in the TECFD sprint

Some emerging microinsurance projects have used blockchain to deliver payments. ACRE Africa links farmers to microinsurance products, with a focus on female subsistence farmers. ACRE partnered recently with Etherisc to make payouts to 17,000 farmers in Kenya through a blockchain-based platform that uses smart contracts. Aon, Oxfam, and Etherisc recently launched the first blockchain-based agricultural insurance policies for smallholder farmers in Sri Lanka. Both programs target areas that have a high volume of female farmers.

Blockchain offers immense possibilities for reaching the unbanked and underserved, allowing the streamlining of insurance products with higher accuracy, and reduced paperwork and administration; this leads to reduced premiums. In areas of high corruption, blockchain can help build trust through transparent delivery of information.

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To have an impact, traditional insurance can't be copy-pasted from developed countries into the developing world. You can build microinsurance without blockchain, but people don’t trust that money is not being taken out of the box through bribes and corruption. If everyone knows that no one is the owner of the technology, as is the case with blockchain, they will see that no one can manipulate it.”

Tobias Noack member of the Operational Board Aon Germany Commercial Risk Solutions Worked on the Sri Lanka project

One way to ensure that payments reach their intended recipient is via “programmable money”. A feature only available on the blockchain, programmable money gives users the ability to define how the money is spent. This ensures that money intended for the household, typically managed by women, does not get spent in other ways.

Such innovations require out-of-the-box thinking and collaboration between insurers, technology providers, finance leaders, and other stakeholders. For example, there is a case to be made for bundling microinsurance solutions with lending. In a project Neha Bhambhani, Co-founder, Resilience Domain worked on at Munich Re, credit tokens gave farmers access to capital to buy raw materials. The business model called for Munich Re to receive a percentage of the commercialization of that crop.

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These insurance schemes can be profitable, and there is more experimentation that needs to be done within the insurance community to create replicable solutions.”

Bhambhani Co-founder, Resilience Domain Munich Re