Arbol launches climate insurance platform using AI and blockchain. How it works?

A start-up based in the United States called Arbol has introduced a parametric insurance platform which is powered by artificial intelligence (AI) and blockchain. They developed it in partnership with The Institutes RiskStream Collaborative. According to a press release on Tuesday, “dRe is live and in production.” This is the first on-chain data calculation tool for reinsurance and is considered a significant milestone for parametric reinsurance.

Parametric or index-based insurance is a kind of insurance policy that insures the policyholder against the occurrence of a specific event, such as floods or storms, by paying a predetermined amount based on the magnitude of the event.

The announcement explained that,

“dRe Lifecycle Dashboard is a smart contract-based system that enables efficient and transparent parametric loss calculations for severe storm catastrophe transactions.”

The platform uses validated weather data from the decentralized climate data network dClimate and Chainlink‘s decentralized oracle network. It then “triggers” a smart contract based on wind speed and location for specific hazardous events.

The team behind it said the system automates “claim initiation, notifications, and loss calculations, resulting in rapid payouts, streamlined data flow, and heightened transparency.”

dRE also uses the Arbol risk framework and pricing platform, which is powered by artificial intelligence algorithms “for efficient underwriting,” a company spokesperson told blockchain.

The platform’s design is flexible, allowing for adaptation to various dangers including rain, heat, or wind, and the potential for non-parametric insurance event notifications.

The creators of the platform believe that all of these features make it “a potent game-changer” in the insurtech landscape.

‘Not Just a Step Forward, But a Leap’

The blockchain-based platform was developed by global climate risk coverage platform Arbol and The Institutes RiskStream Collaborative, said to be the insurance industry’s largest blockchain and emerging technologies consortium.

It employs technologies by the Kaleido platform, said the press release, and it uses RiskStream’s Canopy platform, an end-to-end reusable blockchain framework.

Sid Jha, Founder and CEO of Arbol, argues that dRE transforms the way in which severe storm catastrophe transactions are managed by “providing rapid, auditable, and reliable payouts.”

“By leveraging blockchain technology and smart contracts, we are fundamentally reshaping the landscape of parametric (re)insurance. This platform is not just a step forward; it’s a leap.”

The CEO said that the company’s focus is currently on severe storm events but believes that the system’s design has “far-reaching implications, paving the way for adaptations to other perils.”

Similarly, Patrick Schmid, President of The Institutes RiskStream Collaborative, sees this platform as the first of many applications to be produced.

Arbol and The Institutes RiskStream Collaborative announced their strategic partnership in May, saying that they sought to create “significant value” for the insurance industry by showcasing the power of blockchain and decentralized data storage.

The initial focus of the partnership was on developing an innovative, blockchain-driven parametric solution for this industry, which would improve trust and collaboration among all parties involved, the duo said.

It could be extended to non-parametric insurance solutions for reinsurance programs as well, they stated in May, “harnessing the unique value of smart contracts and DLTs.”

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Learn more:

– What is Blockchain Technology? – This New Crypto Startup Offers a Novel Way to Earn Crypto and Fight Climate Change – Can It Transform the Industry? – 4 DeFi Insurance Protocols Building Safety Nets for Crypto Investors – While Crypto Prices Crash, Experts Say This New Decentralized Freelancing Platform Has More Upside Potential – Here’s Why?

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