Igloo launches blockchain-based weather index insurance for rice farmers in Vietnam

Singapore-based insurtech Igloo, in partnership with PVI Insurance, Vietnam Meteorological and Hydrological Administration (VNMHA) and international reinsurance company SCOR, on Tuesday launched the country’s first weather index insurance – a blockchain-based parametric index insurance product that automates insurance claims from rice farmers. .

Igloo said in a statement with underwriting support from PVI and SCOR, Igloo used blockchain technology to develop a weather index insurance that automates claims through the use of smart contracts.

At a reasonable premium from $8/hectare, with a minimum coverage area of ​​0.1 hectares, the product protects farmers from irregular rainfall distribution.

With rainfall data collected from VNMHA and monitored by Igloo, the parametric insurance will pay out claims calculated using pre-assigned values ​​for losses due to weather events or natural disasters.

It will also eliminate the need to verify claims individually thereby reducing transaction costs and enabling faster payments to farmers.

The business rules that govern claim payouts hosted on a public blockchain help leverage the properties of transparency, consistency, and impartiality, thereby making the setup credible.

“Our Weather Index Insurance product reduces rice farmers’ vulnerability to adverse weather conditions,

“It enables a faster, simpler and more objective claims settlement process and helps provide peace of mind and ease for our farmers as payouts will now be based on triggered events and publicly available official calculations.” said Tri Nguyen, Country Manager for Vietnam at Igloo.

“After covering more than 5,000 hectares, we aim to cover 50,000 hectares in the next couple of seasons in partnership with public-private enterprises,” he said.

The insurance is underwritten by PVI Insurance, Vietnam’s top General Insurance company, and is currently distributed via Igloo’s intermediary service platform – Ignite.

The international reinsurance company SCOR is the reinsurance partner that has demonstrated a pedigree in financial and technical capacity for weather-based insurance products around the world.

In the current phase, the insurance plan offers automated claims in eight provinces of the Mekong Delta in South Vietnam.

Prior to the launch of weather index insurance, Igloo in Vietnam has successfully worked through a built-in insurance model with partners such as the fastest-growing e-commerce platform Loship with one-hour delivery, the on-demand delivery platform AhaMove and high-tech financial services company, LOTTE Finans.

Igloo also launched Ignite by Igloo, an AI-powered platform, to increase salespeople’s productivity through a smoother and more efficient sales process.

To date, the insurtech firm has facilitated over 300 million policies across the region and aims to extend protection solutions to more underserved sectors in the region, leveraging state-of-the-art technology.

Igloo’s strong business potential lies in Southeast Asia’s growing digital economy, which is expected to reach $300 billion by 2025. The growing digital insurance penetration opens up new opportunities for digital players and insurers worth over $10 billion in the region.

“The unprecedented pace of climate change combined with covid-19-induced supply chain shocks has made it imperative to scale up agricultural insurance solutions for the smallholder community,

“Igloo is trying to bring forward an integrated approach with the wider ecosystem to empower the farm level by focusing on product and distribution innovation,” said Raunak Mehta, co-founder and CEO of Igloo.

According to him, the introduction of the first blockchain-based weather index insurance reinforces the firm’s commitment to making insurance accessible and affordable through technology.

“Given the high potential for scalability, we look forward to expanding this insurance solution to cover more farming communities and taking it to other parts of Southeast Asia in the near future,” he said.

Igloo is the first full-stack insurtech firm to emerge from Singapore. It has offices in Singapore, Indonesia, Thailand, the Philippines, Vietnam and Malaysia and technology centers in India and China.

With a goal of making insurance accessible to all, the firm leverages big data, real-time risk assessment and end-to-end automated claims processing to create business to business to consumer (B2B2C) insurance solutions for platform companies and insurers.

Igloo’s insurance solutions enable companies to eliminate exposure to operational risk, create new revenue streams, optimize and improve existing products and services.

The firm has partnered with over 55 well-known brand names across markets in various verticals, including insurance, telecommunications, e-commerce, hospitality, health technology and financial services.

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