FlightDelay AMA Recap
Etherisc CEO & Co-Founder Christoph Mussenbrock discusses Flight Delay insurance with Andy Boyan from Chainlink Labs
Following the launch of Etherisc’s FlightDelay protection, our CEO and Co-Founder Christoph Mussenbrock joined Chainlink’s Creative Media Lead Andy Boyan to conduct a live-streamed AMA session on YouTube. The pair discussed Christoph’s origins in the insurance and blockchain space, the purpose, need and details of how flight delay insurance works, as well as the fruitful collaboration between Etherisc and Chainlink to date.
Read on for a recap of an insightful discussion and watch the whole conversation back below.
Etherisc and Flight Delay origins
Christoph opened the discussion outlining his background and the start of his journey at Etherisc, as well as how the Flight Delay insurance project was created. The product was initially conceived of and coded during one of Christoph’s summer holidays and while it was an incredibly basic version, utilizing just a single smart contract, the concept worked perfectly.
With this proof of concept, Christoph and the team received great feedback at a DevCon event in 2016, convincing them to make a business out of it. This however brought several challenges and legal hurdles surrounding insurance that the team had to overcome.
Christoph explained that this led them to build insurance in a decentralized manner, forming the Etherisc foundation and the DIP token which underwent its ICO in 2018. During this time, they were on the hunt for oracles for the platform which led them to Chainlink.
Christoph highlighted that Etherisc’s first real collaboration with Chainlink was a prototype of FlightDelay launched in 2020, that resonated strongly with the community, sparking a collaborative and fruitful relationship with Chainlink.
What is FlightDelay?
Christoph also touched on the building blocks of FlightDelay insurance, explaining its parametric nature, its core ethos and how it targets those who suffer an economic loss from delayed flights.
Christoph explained how the traditional insurance landscape’s biggest problem involves trust between the various parties. However, implementing insurance on the blockchain via smart contracts allows for a trustless medium — providing greater power to individuals and increased transparency to allow everybody to evaluate the fairness of the offering. Similarly, the system prevents anybody from interfering with the smart contract once it has been purchased.
Looking ahead, Christoph discussed how FlightDelay can progress further with additional data providers and improved user experience to realize our aim of providing a fully decentralized flight insurance market.
How does FlightDelay Insurance work?
Andy and Christoph also took the time to showcase a live demonstration of the FlightDelay insurance product, showing the simple steps on the platform needed to take out a policy on any given flight.
This technology works by collecting data from Flight Stats, a provider offering historical and real-time data for flights worldwide. The historical data is utilized as one of the endpoints to determine pricing, flight risks and prior delays to decide the total amount for the payouts in case of a potential delay or cancellation.
After purchasing the insurance, the transaction passes through the smart contract system which then triggers another transaction with the Chainlink oracle, which repeats the calculation to ensure that the calculated payout matches the data from Flight Stats and the smart contract. If all three parties involved in this process are in agreement, the transaction succeeds, providing the user with an insurance policy.
In case of a delay or cancellation, the payout is distributed automatically and is stored in the smart contract, making it immutable. In addition, policies are only sold if the funding is sufficient and can guarantee insurance payouts.
Future parametric insurance use-cases
Christoph and Andy also spoke of some additional current use cases for parametric insurance, including shipping, crop insurance and more. Christoph is of the opinion that all climate-related risks are perfectly suited for parametric insurance such as rainfall or droughts and hurricane insurance. There are huge stores of existing open-source climate data that has been collected for decades and which can be harnessed to populate the data for parametric insurance products.
In the current scenario, Etherisc aims to take the first small but vitally significant step towards fostering entrepreneurship and innovation in the space, encouraging the advancement of the traditional insurance industry for millions of uninsured or underinsured individuals around the world.
What’s ahead for Etherisc?
Finally, Christoph spoke of exciting opportunities coming up for the Etherisc team in 2022, revealing that enabling staking remains one of the team’s main priorities for the coming year. In addition, the team are also aiming to begin work on a new reinsurance risk pool to connect to and support the risk pools for FlightDelay and crop insurance. This would enable the formation of a complete system of reinsurance, insurance and products within the Etherisc framework.
