AXA Lab Asia and Global Risk Exchange (GRE) are developing a blockchain-based parametric insurance solution to equip agriculture producers to fight against extreme-weather risks.
The platform will use distributed ledger technology (DTL) to connect insurance providers and policyholders to a community of actuaries. Claims will then be triggered automatically via smart contracts during extreme weather conditions. The premiums stay on the ‘chain’ and provides a pool from which any claims can be immediately paid out and insurers can claim their premiums once the policy expires.
The business model caters to small premium products in the P&C space and helps insurers to service customers at an affordable rate. The service has been rolled out to farmers in Southeast Asia. The service can also be extended to car insurance companies.
How AXA’s Global Parametric insurance works
AXA plans to participate as both a primary insurer and a reinsurer on the platform to bolster its blockchain activities in addition to furthering its ambition to grow in the reinsurance space.
Frank Desvignes, Shanghai-based founder of AXA Lab Asia has said of this effort: “Blockchain platforms like GRE provide better protection to the underserved and lowers insurance costs.”
It appears Axa intends to use this platfrom to introduce agriculture risk products whilst assessing which other markets to target.
