New York-based startup Arbol recently revealed an innovative parametric insurance platform driven by artificial intelligence (AI) and blockchain technology. This groundbreaking platform was developed in partnership with the RiskStream Collaborative, reportedly the largest enterprise-level blockchain consortium in the insurance sector. Parametric insurance, which offers compensation for weather-related events like storms and floods, is predicted to triple in size due to uncertainties amplified by climate change, according to Allied Market Research.
The platform, named dRe, is tailored for reinsurance – insurance for insurance companies – and currently targets severe storm catastrophes. By leveraging verified weather data from the leading decentralized climate data network, dClimate, and Chainlink’s reputable decentralized oracle network, dRe is capable of triggering a smart contract based on wind speed and location for specific peril events.
However, although impressive and seemingly secure, there may be concerns from critics regarding the reliance on AI and blockchain technology. These may include worries about the potential for malfunction or failed integration and detractors questioning the efficacy of AI algorithms in the underwriting process.
Despite these reservations, dRe also incorporates Arbol’s own risk framework and pricing platform, fueled by advanced AI algorithms for efficient underwriting. The platform automates claim initiation, notifications, and loss calculations, aiming to accelerate payouts and improve transparency in the system.
Arbol shares a founder with dClimate, a decentralized marketplace for climate data. The insurtech firm had a successful $9 million Series A round in January 2021, based on information from startup platform Dealroom.
In conclusion, the dRe platform, with its AI and blockchain-driven parametric insurance, is poised to revolutionize the reinsurance market by offering quicker, more transparent payouts for weather-related catastrophes. Despite possible concerns about the use of AI and blockchain in such a critical industry, this innovative solution provides an exciting glimpse into the future of technology-driven insurance. As climate change continues to impact weather patterns worldwide, demand for efficient and accurate parametric insurance is to be expected, and dRe’s success could inspire the adoption of similar technology solutions in the industry.
Source: Coindesk
