AgBIS: A Blockchain-enabled Crop Insurance Platform Against Adverse Selection, Moral Hazard, and Insurance Frauds

Crop insurance is widely adopted to help farmers stabilize incomes and mitigate uncertainties. However, current crop insurance systems face significant challenges, including adverse selection, moral hazard, and insurance frauds, further exacerbating the difficulties associated with cost, program sustainability, and market failures. This paper dives into the subsidized multi-peril crop insurance programs and proposes AgBIS, a blockchain-enabled crop insurance platform, to mitigate the problems of adverse selection, moral hazard, and insurance frauds within crop insurance ecosystems. We conduct a systematic study on risk factors and the negative effects of those problems and identify information asymmetry as the main cause of the above problems. AgBIS aims to reconstruct the crop insurance system by facilitating transparency, efficiency, and interoperability among stakeholders. Additionally, AgBIS integrates a trustworthy hardware oracle to provide participants with highly reliable and authentic crop-related data, thus reducing information asymmetry and enhancing program sustainability.