Administering Weather Index Crop Insurance for Low-Income Farmers using Blockchain Technology and Internet-of-Things Sensors

Low-income farmers in developing countries are highly vulnerable to extreme weather events, which can drastically reduce crop yields. Traditional crop insurance is slow, costly and administratively heavy, characterised by lengthy claims handling processes and requiring site visits to assess the claim validity, resulting in delayed payouts and limited accessibility. This study designs, develops and evaluates a weather index crop insurance proof-of-concept platform that leverages IoT-based weather data collection and the Algorand blockchain to enable secure, transparent, low-cost, and automated insurance transactions. The platform digitises insurance policy management and triggers automatic payouts when predefined weather index conditions are met, eliminating manual claims verification. Evaluation shows that farmers can enrol in an insurance policy in an average of 9.13 seconds at a transaction cost of 0.001 ALGO, while payouts are processed in an average of 16 seconds following qualifying weather events. These results demonstrate substantial improvements in efficiency and accessibility compared to conventional insurance administration, which can take days or weeks. The platform enhances climate and financial resilience for low-income farmers, reduces administrative overhead for insurers, and provides a scalable framework for implementing index-based insurance in emerging economies.