Examining Potential of Peer-to-Peer Insurers

I’m always happy to pass on great info, and this is great info! I’ve included a few snippets below lifted from the full article.

Can Peer-to-Peer Insurance Succeed?

Peer-to-peer business models really came into their own in the financial arena, where companies such as Prosper and Lending Club were able to create platforms that allowed individuals to loan funds directly to one another.

Exposure

The exposure component is the one that deals with claims; past, present and future. The P2P model looks to reduce the frequency and severity of losses by reducing the desire among policyholders to make bogus claims.

Distribution

The distribution component of the framework deals with how companies market to and sell to customers. In the P2P model, there is a heavy emphasis on the social element, like-minded insureds telling other like-minded insureds to join.

Capital

Insurance is a capital-intensive business. To start a plain-vanilla company in most states requires $5 million to $10 million in surplus capital. This is capital that is above and beyond capital that is used to pay for claims.

Do you need more detail on this subject? Head on over to the full article here for more ideas and perspective. Afterwards, why not drop me an email to share your thoughts [email protected]; or call me on (0408) 885-417.

Thanks,

Mark