Blockchain can fix India’s dysfunctional insurance system, says WEF

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Blockchain technology in general, and smart contracts in particular, can “reveal the hidden values ​​of older digital systems,” according to a report co-authored by representatives of the World Economic Forum and Chainlink. To understand how to do it, look no further than India’s crop insurance system.

In a 40-page whitepaper published on Wednesday, the Geneva-based organization emphasizes the importance of interoperability between legacy systems and distributed ledger technologies – but only for specific use cases that are suitable for blockchains.

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“Once readers have established that blockchain is desirable for their specific use case and business processes, this paper aims to highlight the role of blockchain, smart contracts and oracles in accelerating the automation of such processes.”

Although the paper promotes highly technical and abstract solutions to improve interoperability between blockchains and legacy systems – which it refers to as the “interoperability bridge” – it provides a concrete example in the form of the Indian crop insurance system, developed in 2016, for insurance coverage and financial assistance for natural disasters affected farmers.

Issues ranging from transparency and accountability to corruption and information security were raised by those involved in implementing the system. The white paper shows how blockchain-based smart contracts and Oracle systems can overcome these challenges.

The paper reads:

“The crop insurance program is a case in point to highlight the current shortcomings most legacy systems face when conducting multi-party business processes.”

It goes on:

“If, for various reasons, the goal of a company is to automate business processes in a decentralized and disintermediate manner, a blockchain-based architecture is essential.

Indian regulators had mixed feelings about cryptocurrencies but were far more receptive to blockchain technology. Earlier this year, the National Institution for Transforming India, a government agency, released a report examining the role of blockchain in improving business, social and governance outcomes in the country.