As we have repeated many times on this channel, the insurance companies are in need of innovation. Over the past 50 years the channels and methods employed by insurers have become increasingly outdated while other industries have embraced new forms of operation.
P2P vs. Traditional Insurance
Traditionally, insurance companies operate by pooling the premium payments of a large group of strangers, and using this pool to pay out claims. Members of the group pay varying premiums based on their likelihood of needing to lodge a claim in the future, so those who are deemed to be more accident-prone pay higher premiums. Any money that remains is kept by the insurer as revenue.
In a P2P system, the group is much smaller, and is curated by customers. Usually it will be a group of close friends and family, all pooling their resources to provide support if one or more of them encounters misfortune. Many services that offer P2P insurance return a high percentage of clients’ premiums if their coverage ends without incident. On top of the premium, many services charge a small membership fee, as they must profit somehow if they are returning unused premium payments.
What Sets P2P Apart?
The benefits of P2P over traditional are numerous. I’ve already mentioned the large savings thanks to cashback offers, with some services giving back up to 85% of premium payments provided you have good fortune.
Additionally, you can curate your pool so that it is made up of low risk members. This results in lower premiums for all parties.
Knowing all members of your insurance pool allows for more transparent transactions, and people will always know who is filing a claim and how much they are given for it. The opaqueness of traditional insurance processes is often a reason for people to distrust them, and this smaller and more transparent method can improve this.
Plus, if you personally know all the people in the pool, you are less likely to try to scam them or launch fraudulent claims. Due to the sheer size of insurance companies, fraudulent claims are not always detected, and this results in massive losses for those involved. It is easy for people to be dishonest with an insurance company that often seems like some massive faceless monolith, or even an ‘evil corporation,’ but if the only people you’re hurting by launching a shifty claim are your close friends, family, and perhaps acquaintances, you are far more likely to operate honestly.
SURETY.AI is a blockchain based artificial intelligence (A.I) platform for insurance companies developed by Hearti Lab Pte Ltd (Hearti).
SURETY.AI allows insurance companies to connect effectively with their customers by offering micro-insurances, on-demand and at affordable prices, to Asia’s fast growing economies through Decentralised Enterprise Insurance Network.
As insurances are closely tied to healthcare, where healthcare services such as medical check records are often used for underwriting and preventive measures, Hearti is also working with Healthcare partners to integrate their services and data into SURETY.AI.
Find out more about SURETY.AI through this short and informative video! 💻
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