Open-source, decentralised insurance protocol and ecosystem Etherisc has launched a blockchain-backed insurance application that can autonomously issue policies and execute payouts for travel delays and cancellations.
FlightDelay is available for global passenger flights operated by the world’s top 80 airlines, and offers policies purchasable via Etherisc’s dedicated FlightDelay Portal.
Payments are processed through blockchain payments program Gnosis Chain (formerly xDai Chain), with an initial payment option of the US dollar-backed USD Coin. Further conventional fiat currency and cryptocurrency payment options are currently in development.
Being fully decentralised, the insurance risk pool is generated entirely by members of the Etherisc community who actively commit their assets to the ecosystem’s decentralised insurance protocol (DIP) token.
According to Christoph Mussenbrock, Co-Founder at Etherisc: “Contacting a traditional provider and applying for an insurance claim is a time-consuming and tedious process, which compounds the frustration of experiencing a flight delay. Blockchain has tremendous potential to simplify many aspects of modern life for the better; through the power of automated smart contracts and decentralised oracles, this arduous process is now made simple and hassle-free. People can easily sign up for a policy to secure their flight online, turn up at the airport, and receive a fair payment directly to their preferred wallet should their flight be delayed for longer than 45 minutes.”
FlightDelay offers a secure alternative to traditional insurance policies
Etherisc says that the product combines ‘the decentralised security of the Ethereum [blockchain] network with the decentralised oracle framework of Chainlink’ to provide policyholders with a secure, transparent end-to-end flight insurance solution.
Blockchain is a technology which uses asymmetrical encryption to make digital assets or software secure. Ethereum is one variety of blockchain technology. An oracle, is a ‘middleman’ which can interpret blockchain encryption, allowing it to be changed between usable and unusable forms. Oracles tend to be decentralised as part of ‘frameworks’ - of which Chainlink is one - to ensure that there are multiple outlets for blockchain data to be extracted, so that if a single oracle becomes faulty or compromised, the data can still be extracted accurately. This is extremely important for blockchain-encrypted smart contracts, where accuracy of information is key.
What Etherisc is saying is that FlightDelay offers the secure, non-tamperable encryption of blockchain technology, with the security of knowing that policies can be easily and accurately retrieved once encrypted.
William Herkelrath, Managing Director at Chainlink Labs, added that: “Parametric insurance built using hybrid smart contracts has a real opportunity to disrupt manual claims processing by reducing employee labor, server, software management, and other overhead costs via blockchain-based automation. We’re excited to enable Etherisc’s new parametric flight insurance solution by provisioning reliable data feeds on-chain that help its smart contracts determine if flights are delayed. We hope this can bring new levels of transparency and speed to claims processing and demonstrate the many possibilities for hybrid smart contracts in the insurance industry.”