A Critical Analysis on the Capacity of Blockchain-Based Parametric Insurance in Tackling the Financial Impact of Climatic Disasters

Abstract

This chapter shows that implementing parametric insurance on the blockchain can overcome efficiency and transparency gaps, and hence can scale up insurance penetration, especially in developing countries. Blockchain-based parametric insurance achieves this through disintermediation: it removes inefficiencies by automating the entire insurance cycle; and it increases the transparency of insurance data with secure, immutable distributed ledgers that transfer and aggregate data, and make that data publicly available.