Ethereum Could Bring Disaster Relief To Victims

After Hurricane Katrina decimated New Orleans in 2005, there was mass confusion and anxiety as residents waited to receive financial relief from the Federal Emergency Management Agency (FEMA) and insurance companies.  FEMA payouts, which were provided in the form of debit cards, were often delayed or lost and there are reports that as much as $500 million in federal money was lost due to fraud. Insurance payouts were severely delayed due to the overwhelming caseload that insurance adjusters had to tackle. It would be nice if there were a system in place that could easily and swiftly address disaster victims’ needs and, now, insurance professionals may have found a solution.  

Etherisc, a Switzerland-based company that creates insurance products using the Ethereum blockchain, is leading a global charge to automate at least part of the disaster relief equation.  Specifically, that of insurance payouts. It has designed a process that uses Ethereum smart contracts to help speed up insurance claims.

If the program is successful, it could pave the way for an insurance claim to have its workflow shifted to a distributed ledger, which could ultimately lead to automatic payouts in some cases.  Since the distributed ledger is an immutable and global ledger, it can also help to prevent insurance fraud.

As US east coast states like Virginia and North Carolina currently wait to see what Hurricane Florence is going to bring, Etherisc’s program isn’t ready to be rolled out, but Florence could provide the impetus for rapid development.  Says Etherisc co-founder Renat Khasanshyn, “We'd love to offer policies in Virginia. Yet launching a product in multiple locations is no easy task."

Etherisc’s power has already been recognized as having great potential for disaster relief.  After Hurricane Maria stuck Puerto Rico last year, there are still around 225,000 insurance claims that haven’t been resolved.  Approximately 3,700 deaths resulted, not from the storm directly, but from a lack of access to medicine and other provisions. An insurance startup company, HurricaneGuard, is now using Etherisc technology to develop a program that, had it been in place, could have saved thousands of lives following the storm.