Lemonade to Offer Blockchain-Powered Climate Insurance for Farmers in Emerging Markets

Lemonade, a top American insurance company, has revealed the formation of the Lemonade Crypto Climate Coalition meant to offer blockchain-enabled climate insurance to the most vulnerable farmers across the globe.

Through its nonprofit organization dubbed the Lemonade Foundation, Lemonade has partnered with other companies like Chainlink, Avalanche, DAOstack, Hannover Re, Tomorrow.io, Pula, and Etherisc as founding coalition members.

Based on the Lemonade Foundation’s objective of rendering environmental and social change through technology, the coalition is being established as a Decentralized Autonomous Organization (DAO) to create and distribute parametric and instantaneous weather insurance to livestock keepers and subsistence farmers in emerging markets. 

The climate insurance will be developed on Avalanche’s proof of stake (PoS) as a stablecoin-denominated decentralized application (dapp). 

With the initial rollout expected in Africa this year, farmers will have the ability to make and receive payments using local currencies or stablecoins. 

Daniel Schreiber, a director at the Lemonade Foundation, welcomed the collaboration and stated:

“By using a DAO instead of a traditional insurance company, smart contracts instead of insurance policies, and oracles instead of claims professionals, we expect to harness the communal and decentralized aspects of web3 and real-time weather data to deliver affordable and instantaneous climate insurance to the people who need it most.”

With Africa having nearly 300 million smallholder farmers who face real climate risks, Rose Goslinga believes blockchain-powered climate insurance will come in handy in safeguarding their livelihoods.

The co-founder of Kenya-based insurtech Pula added:

“This is where the power of the Lemonade Crypto Climate Coalition comes in: An on-chain solution that can be immediately impactful at scale will allow farmers to finally get financially protected against the increasingly frequent risks such as drought.”

Blockchain is emerging as one of the sought-after technologies for tackling climate change. For instance, Samsung Electronics announced plans to utilize blockchain in a climate-focused reafforestation program in Madagascar earlier this year. 

Image source: Shutterstock


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Etherisc onboards 17K Kenyan farmers covered by blockchain-based crop insurance

An insurance collaboration between decentralized protocol Etherisc and microinsurance issuer ACRE Africa has allowed thousands of farmers in Kenya to receive coverage for weather-related risks.

Etherisc and ACRE Africa said they had processed insurance payouts for some of the more than 17,000 smallholder farmers in Kenya covered under the collaboration. The Chainlink Community Grant, the Ethereum Foundation and the Decentralized Insurance Foundation helped fund the project, which was first announced in November 202.

“We’re thrilled that after months of hard work on this initiative, we’re seeing the fruits of our labour — which has a tangible social impact on farmers in Kenya who are threatened by the devastating effects of climate change,” said Etherisc chief inclusive officer Michiel Berende. “The solution that we built with our valued partners at ACRE Africa overcomes a number of challenges associated with traditional crop insurance — delayed payments, high premium costs, and lack of transparency.”

As part of the initiative, smallholder farmers are reportedly able to pay as little as $0.50 in premiums to receive coverage for crops adversely affected by climate change — Kenya has been previously hit hard by both droughts and flooding. Though Etherisc and ACRE Africa said they aimed to reach roughly 250,000 farmers in East Africa, some of those already receiving coverage have been paid using an end-to-end solution on the blockchain.

Etherisc reported it had dispersed payments to farmers in need using the cash and mobile payment system M-Pesa, with roughly 6,000 expected to be compensated for lost or affected crops before the end of the season. Kenya is home to a large number of flower farms, but it also grows sugarcane, sweet potatoes, maize and other fruits and vegetables.

Related: Banking The Unbanked? How I Taught A Total Stranger In Kenya About Bitcoin

Many have touted blockchain solutions for a multitude of issues facing residents of African nations, from helping women become financially independent to proposing blockchain voting systems to reduce costs and provide more secure elections. In Zimbabwe, a blockchain-based tracing app allows local farmers to track and trace cattle, a system aimed at making it easier to export beef and increase profits.