Insurance is broken, centralised, and out of date.
Currently it takes a legally instituted corporation to collect premiums, manage a massive pool of money adhering to many regulations, decide when to payout and rake off the profits.
But what if the insurees trusted one another instead of the insurance company?
Transparency about rate of risk would mean premiums were realistic and increasingly accurate over time.x
- Cost savings from not managing a pile of money
- cost savings from not complying to regulation
- cost savings from not feeding a multinational
- cost savings from not paying actuaries.
- Strengthens community and solidarity
Here’s how it could work.
A member is given access to join a mutual insurance circle which is a private group of trusted members.
- The member registers the item to be insured with a value and is given an account with balance 0;
- That value represents their stake in the pool.
- When an item is reported lost members go through some voting procedure to decide to pay out.
- Each member’s account is debited in proportion to their stake
- Some members pay the bank account of the loser, and in so doing, top up their own accounts
- If a member wants to leave, they pay another member or claim their positive balance back.
No money passes through the coop
Accounts might be kept on a blockchain - might be an etherum app which does simple accounting and voting.
After a loss, a members bank account should be credit within a very few days.
The software for this could be very easily published and run by any group, community group, social club, union etc.
There would be a manual or maybe a wiki developed on the basis of experience about limiting risk exposure, conflict resolution, governance, voting methodologies etc.