By FINTECH Books Contributor, Vesna Planko
Is peer-to-peer insurance a new thing? No. Friendly Societies have been around for hundreds of years and may even have their origins dating back to Roman times. They grew from the simple premise that if a group of people contributed to a mutual fund, then they could receive benefits at a time of need. The role of Friendly Societies became acknowledged by the Government and membership was encouraged.
The act of 1875 called for a system of auditing and registration. Technology has played a huge role in shaping consumer behavior over the past several years. Times are changing, millennial have different needs. Researching their user experience and behavior, we can craft it accordingly. Home insurance hasn’t adapted to the era of Airbnb and car insurance is even more hopeless when it comes to Uber and the sharing economy.
The industry seems an obvious area for a tech-savvy startup to “disrupt.” We need a new kind of insurance company using tech-driven approach to calculating a smarter coverage and user-centric design approach to provide a simpler process and more engaged users. The aims of peer-to-peer insurance are to save money through reduced overhead costs, increase transparency, reduce inefficiencies, and especially to reduce the inherent conflict between insurance carriers and their policyholders at the time of a claim.
The real beauty about P2P is that it can draw on the benefits of both social media and traditional insurance to create a superior product. The new insurance uses machine learning to provide predictable premium and blockchain technology to offer transparency on performance. Bots are taking the communication over too and one of the latest sectors to succumb to the trend is Insurtech.