“So many businesses have been forced to close here, because they don’t have power or can’t afford a generator or the diesel to run it, or because they’ve suffered too much damage. Few of them have sufficient cash reserves to survive, being closed for an extended time.” — Tom Gjelten, National Public Radio (Quote source).

This storm created maximum sustained winds of 155 mph and torrential rain across the island with estimated costs upwards of $95 billion.

When Hurricane Maria hit, Puerto Ricans had no access to electricity and mobile phone service in the capital and across most of Puerto Rico. People had trouble keeping on the lights, getting gasoline, keeping their jobs, and running their businesses.

Over the past few months, insurers have been analyzing the damages and losses. But, we’ve met countless families struggling with insurance company delays, non-payment, and having no other alternative.

In January, two Puerto Rican software developers, Joel Martinez and Jonathan Gonzalez, reached out to Renat Khasanshyn of Etherisc asking how they could design a new kind of insurance that would reliably serve the real needs of Puerto Ricans — especially low-income households and small businesses. They told Etherisc that people need better solutions, because without that many families with the means are migrating.

Designing a new kind of collaborative, decentralized insurance

Joel and Jonathan are likely to be the first non-insurers designing and launching an insurance product in Puerto Rico using Ethereum and Etherisc.

Joel Martinez, is a full-stack developer, works on several open-source and blockchain projects, is based in both San Juan, Puerto Rico, and New York, and wants to help his family and community recover in Puerto Rico.

Joel Martinez, Full Stack Engineer; Keeper on Etherisc Network

Jonathan Gonzalez, is a full stack developer and UX designer based in San Juan, a dynamic entrepreneur, and a leader in Puerto Rico’s startup spaces. He is working with companies, government agencies, and developers to improve services and opportunities for many years.

Jonathan Gonzalez, Fullstack Developer, UX Designer; Keeper on Etherisc Network

Jonathan and Joel are keepers on the Etherisc network. As developers and entrepreneurs, they come up with ideas and keep product development moving forward.

Just as Relayers on 0x Protocol, Keepers on the Etherisc protocol may choose to earn transaction fees from revenues of insurance products they keep running.

As Keepers on Etherisc, Joel and Jonathan are able to leverage an end-to-end insurance product toolkit, including:

generic smart contracts for policy pricing

issuance

monitoring

claim processing

assistance with access to reinsurance capital

simplified insurance licensing

Q&A with Joel and Jonathan, Keepers of Hurricane Insurance

We had a short Q&A session with Joel and Jonathan. Here is what they told us.

Why are you working on this project?

Joel: So, I can take a meaningful blockchain product to market and help my people, in a very tangible way at the same time.

Jonathan : To work on a meaningful project that impacts Puerto Rico in a meaningful way.

What problems did you see in the aftermath of Hurricane Maria?

Joel: Houses and apartments boarded up for months, waiting for insurance payouts. Most retail level jobs on hold — immediate loss of income for family members. No electricity for months.

Do you see any problems related to how traditional insurance companies fulfill their promise to pay for damages and make customers whole?

Joel: Payouts take too long. During the time spent waiting for money to repair a window or a roof, the property keeps getting more damaged.

Do you really like traditional insurance companies?

“No,” says Joel, while Jonathan adds : “I’d be hard-pressed to find someone talking positively about a local insurance company.”

Do you and other people of Puerto Rico really trust traditional insurance companies, and if not — why?

Joel: I trust code more than a claims adjuster.

Turning Etherisc Flight Delay Insurance into Hurricane Insurance

What exactly is your role in the project? What are you responsible for?

Joel: Back-end and Solidity development. I’m responsible for implementing Etherisc templates according to our product specifications. In the past, I’ve founded startups and brought many digital products to market. I’m a full-stack software engineer.

What kind of skills/resources/people are you looking for — to join the team or partner with?

Joel: More developers and DeVops. Sales people, customer support.

Screenshot from product design call of a Hurricane Insurance

What outcome do you think this project brings to people of Puerto Rico?

Joel: For the people of Puerto Rico, a fast and reliable way to purchase a generator, so they can at least run the refrigerator. Also, a way to access funds to fix a window or the roof, so that water doesn’t pour into the house. For other developers, a pattern for integrating the necessary parts for a parametric insurance product.

Researchers estimate that Puerto Rico could lose around 470,000 residents between 2017 and 2019 as a direct consequence of the devastation caused by Maria. But, for those that remain, access to electricity is vital. Сell networks, generators, and cash are incredibly tenuous, and now some 90,000 borrowers are behind on their mortgage payments and likely to lose their homes as an aftermath of Hurricane Maria.

Parametric Hurricane Insurance

The team of Etherisc believes Puerto Rico deserves the best risk protection that will help people to re-build their homes and country.

Just like Joel and Jonathan, anyone can use Etherisc’s open-source templates to build and customize their own insurance. Within weeks, several government agencies expressed support for a new product and offered to work with us.

The team chose to create a “parametric” insurance policy for Puerto Rico’s hurricane risk. Parametric insurance makes use of public weather data sensors measuring wind speed. Major hurricanes are those classified as Category 3 and higher based on a one-minute sustained wind above 111 mph. Immediate payouts will take place within 24–72 hours of a major hurricane hitting the island.

The insurance will make a fixed payout of $3,000 to $9,000 based on the storm’s intensity. Although $9,000 is not enough to rebuild an entire home or business, Puerto Ricans still need an immediate infusion of cash, so that they can survive for 3–6 months after the storm, pay for a generator, gasoline, food, medicines, small repairs, and other essentials. This also means that the premiums will be more affordable to low-income families and small businesses on the island.

How is this product different from traditional insurance?

Currently, we are working hard on delivering an insurance product with a number of significant differences compared to traditional insurance, as you can see in the table below (terms are subject to change).

(Note: These terms are in a draft form and are subject to change.)

Conclusion

This is the first installment where we showcase Joel and Jonathan as the first Etherisc Keepers who help building decentralized insurance applications with the Etherisc protocol to solve real problems and manage risks in their communities.

Joel and Jonathan are likely to be the first non-insurers, who are designing an insurance product using Ethereum and Etherisc.

Keepers on the Etherisc protocol may choose to earn transaction fees on revenues of insurance products — similar to Miners on Ethereum and Relayers on 0x Protocol.

All workers on the Etherisc network, including Keepers, Oracle/Data Providers, License Providers, and Distributors can earn a fair share of created value, regardless of age, wealth, or personal connections.

By April 27, 2018, the work on Hurricane Insurance has already been in progress for 30 days. Release schedule features a working prototype in the next 30 days and a production-grade implementation in 120 days.

We wanted to share how this team is doing with the new insurance product being built for Puerto Rico by Puerto Ricans!

If you care about helping Puerto Rico and would like to join Joel and Jonathan’s team, or have ideas for a strategic partnership or distribution for the product — we would love to make an introduction — email [email protected], or ask in our community Telegram chat.