What's your opinion of the insurance industry?

[Gibbay]

Hello all,

Some background. My project involves a deep dive into the economics of insurance. And suggest answers (=a whole new mechanism)...

What could be truly disrupted in the insurance industry?
Would a DAO be the solution?
What is your view of the insurance industry )agents, brokers, various middlemen, insurance companies, reinsurance companies, regulators)?
We all know they are super slow. Slow to pay claims. Slow to embrace technology. Slow for everything.
But do you trust the industry? It would nice if you provide the context such as "I have a life insurance policy"

Who do you trust? Why? If a DAO was well organized, funded, and solid would you trust them more than an insurance company?

Have you ever thought about where the money comes from? Would you be interested in being part of a group of backers (= providing a form of insurance).
Don't forget that a high level insurance is just a gamble. Lloyds in London is famous for that. Based on limited information they will say whether they will insure your project (oils rig, terrorist attack, or the fingers of a famous pianist) and at what price. They may impose restrictions as well: for example ships can't go in certain geographic areas (example offshore of Somalia).

Would you prefer to deal with an adjuster and a bunch of experts or would you prefer a simple smart contract?

I would really appreciate feedback from the group. Thank you,

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[davis196]

If a DAO was well organized, funded, and solid would you trust them more than an insurance company?

Yes,but there's a big maybe.
Insurance fraud is a thing and a simple smart contract cannot handle the cases of insurance fraud.
All the big insurance companies are hiring detectives to investigate cases of insurance fraud.Do you think that  a decentralized insurance platform can solve this problem?
You can't bypass the human factor in the insurance industry.
The insurance industry is heavily regulated by the state and I don't think that any government would allow smart contracts and decentralized insurance.
Loyd's in the UK is a pretty old insurance network,but I don't know about any other companies in the world,that are copying the Loyd's business model.There must be a reason for that.
Calling high level insurance "just a gamble" seems like oversimplifying.The insurance industry is more complex than you think.Those experts know how to calculate the risk.

[mk4]

On the top of my head, most probably not. Correct me if I'm wrong, but insurance is one of those things that you're pretty much guaranteed money if it's the case that something happens to you that fits right in their eligibility criteria. What if the insurance wasn't granted by the DAO despite you being eligible? Who are you going to sue then? You're going to have a really really hard time trying to unmask anons.

[odolvlobo]

How would a smart contract replace an adjuster?

[mu_enrico]

I think you need to breakdown the problem. If the problem is complex, there's no single antidote that can cure all the problems. Let's see several areas that we can improve:
- Agent/brokers/middlemen: this the area in which inefficiencies occur, it can be reduced into "host/personal customer support" whose job is to make sure all documents provided by insured are legit, preparing paperworks, continually in touch with the insured. Can an app replace it? Or human touch is still preferred?
- Who will calculate VAR, premium, etc. can algorithm calculate it better than human (expert)?
- Slow to pay claims: how can the technology make it faster to verify all documents?

Automation needs a well-thought architecture, and without a clear white paper, it's difficult to tell whether or not your DAO will make sense.

[NeuroticFish]

OP, the radio boxes on the top show that you don't seem to have a deep enough understanding of insurance industry.
I will not write again what's already in the previous post, but there are many complex operations (from getting the best premium/benefit ratio to avoiding fraud) involved there which cannot be automated/put into smart contracts. Also without humans pestering the others to buy insurance from your platform, they may easily turn to the competition, just because there's somebody to (pretend they) hear them there.

[Hydrogen]

My general impression of insurance industries, goes something like this.

• Detailed surveys of the consumer base are utilized to generate annual cost projections
• Said cost projections are divided by the size of the insurance pool, with a 5% markup on premiums to allow the insurance agency to reap a 5% profit
• In a year with more disasters and emergencies than projected, insurance is in danger of having profit margins decline into negative territory
• Insurance can be very limited by wealth and wage inequality, in terms of what disposable income consumers can afford to pay

It might be fair to say insurance is about mitigating risk.

While it may seem as if there are many middlemen who can be cut out of the equation similar to how walmart is known for streamlining their supply and distribution chains. It is possible that many middlemen are sales people or part of the network of accurate future cost projections. Both of which could be vital to survival and continuation in the industry.

Insurance can have a negative reputation for disputing claims and refusing deserved payouts on petty technicalities. But generally I think most insurance companies have very low profit margins, if they manage to turn a profit at all. Disputing claims and refusing payouts could be more an aspect of survival for insurance firms, than it is profiteering or a predatory or exploitative business practice.

[Fortify]

Hello all,

Some background. My project involves a deep dive into the economics of insurance. And suggest answers (=a whole new mechanism)...

What could be truly disrupted in the insurance industry?
Would a DAO be the solution?
What is your view of the insurance industry )agents, brokers, various middlemen, insurance companies, reinsurance companies, regulators)?
We all know they are super slow. Slow to pay claims. Slow to embrace technology. Slow for everything.
But do you trust the industry? It would nice if you provide the context such as "I have a life insurance policy"

Who do you trust? Why? If a DAO was well organized, funded, and solid would you trust them more than an insurance company?

Have you ever thought about where the money comes from? Would you be interested in being part of a group of backers (= providing a form of insurance).
Don't forget that a high level insurance is just a gamble. Lloyds in London is famous for that. Based on limited information they will say whether they will insure your project (oils rig, terrorist attack, or the fingers of a famous pianist) and at what price. They may impose restrictions as well: for example ships can't go in certain geographic areas (example offshore of Somalia).

Would you prefer to deal with an adjuster and a bunch of experts or would you prefer a simple smart contract?

I would really appreciate feedback from the group. Thank you,

You should really narrow down your conversation because it is far too vague and open. Of course insurance is a good idea, the only people who don't need insurance are people who could cover the costs of a catastrophe without it affecting them too much. In a hypothetical situation, if you're a millionaire and own a piece of Jewelry that costs $1 million but $100k each year to insure - then you might not bother with such a cost on the small chance something happens to it you can just replace it. If you're an average person and don't insure your house in event of a fire, you could lose everything that you've been working for your whole life. Most of the stuff you mention like reinsurance and regulators are totally irrelevant to the interaction that an average consumer will have.

[SirLancelot]

On the top of my head, most probably not. Correct me if I'm wrong, but insurance is one of those things that you're pretty much guaranteed money if it's the case that something happens to you that fits right in their eligibility criteria. What if the insurance wasn't granted by the DAO despite you being eligible? Who are you going to sue then? You're going to have a really really hard time trying to unmask anons.

And the other way around, imagine if someone is not eligible or makes a false claim and the DAO releases the funds, then it would be a problem because any problem in such a system fund can be repeatedly abused.

Insurance fraud is a thing and a simple smart contract cannot handle the cases of insurance fraud.

You are right and that's why while smart contracts are being used in almost every aspect nowadays, there are areas where human intelligence is required and it's impossible to implement smart contracts which are based on the conditions.

[fiulpro]

A simple smart contract is always better. I used to have insurance controlled by the government, which generally meant that I didn't really have to go forth and deposit seperate for the particular part, the deducted a small amount every month. Now there was this probelm with the RBI and bitcoins, that they banned my bank account which actually caused me a lot of probelms but I did not further care about my insurance even though I have been paying timely for 2 years, the authorities as well did not call me about that therefore for me the insurance industry is not a big deal, I would rather save money or you know take per year health insurance from a company, it's more secure, like right now living in Europe I had to buy an insurance for my temporary residency, so I actually did take it from a company, plus I get free doctor consultations and appointments, etc, it's cool and regarding the life insurance, that's something to worry about for people who have their whole family dependent on them.

[so98nn]

Dam those are too many questions. Honestly speaking I would just state some general opinion about the insurance based on my personal experience about it and it’s claim. Well most of them are being treated well with their services and different features such as extra mediclaim, inclusive of family packs and the insane returns. In fact kn India the life insurance can also help you reduce the taxes being levied on our salaries. These are all just for the purpose of attraction and also be way beneficial.

Not sure if this is relevant but mediclaim is worst hit package in the life insurance. Once in while parents would always be little off track with health issues but these companies would try everything in their possession to let client go without it and thus get all the money itself. 

[Gozie51]

Who are you going to sue then?

I think the suing thing can be possible with countries that have legalized bitcoin because they would guarantee that investors are protected from every exchange scamming hodlers. On the contrary the countries not having legalized bitcoin, insurance would not work. Insurance itself has more of legality in it so we can't talk about them separately but insurance and legality are mutually inexclusive.

[xSkylarx]

Who are you going to sue then?

I think the suing thing can be possible with countries that have legalized bitcoin because they would guarantee that investors are protected from every exchange scamming hodlers. On the contrary the countries not having legalized bitcoin, insurance would not work. Insurance itself has more of legality in it so we can't talk about them separately but insurance and legality are mutually inexclusive.

Scammers can only be identified if they are seen in person. In my limited experience, I haven't heard of or seen anyone go to jail for falling victim to an online scam involving bitcoin; most cases are simply reported, but nothing is done about them. However, no one seems to know who to sue because people are just ranting about their money on the internet. In contrast to physical scams like those that occur here in the country, HYIP is extremely well-known, and as a result, the leader or owner usually leaves after a few months, only to be arrested later because they were aware of his identity and could easily track him down.

[paxmao]

The insurance industry has already been disrupted. From a traditional structure with re-insurers, retail and industrial insurers and retail insurance representatives for sales and aftersale service, all done in written, in person and with complete lack of transparency, we are now in the era on on-line comparing engines and on-line advisors and in the era of the start-ups that harness all the technological savvy of the newer user to tailor products to their daily habits and new needs.

Complexity is minimised by using plain language, the middle-person disappears and the field is open for Venture Capital.

[mk4]

Who are you going to sue then?

I think the suing thing can be possible with countries that have legalized bitcoin because they would guarantee that investors are protected from every exchange scamming hodlers. On the contrary the countries not having legalized bitcoin, insurance would not work. Insurance itself has more of legality in it so we can't talk about them separately but insurance and legality are mutually inexclusive.

We're talking about a DAO here; a group of mostly anonymous people online. Sure you can sue if you want, but who are you going to sue? You're going to need to pay the FBI or something to at least attempt to unmask the anons; which will most definitely cost you a lot more than you could potentially get.

[timerland]

I think that https://nexusmutual.io/ is already offering a lot of insurance on protocols/platforms.

However, the fact that they openly advertise themselves as an insurance DAO, but at the same time proclaim that they are not an insurance product and the ultimate right to all insurance payout decisions is reserved by the DAO is really off-putting.

E.g. what if Binance goes down and the payouts would essentially crush the DAO? Would members vote in favour of compensating in full, or simply chicken out due to self-interest?

[The Sceptical Chymist]

Would a DAO be the solution?
What is your view of the insurance industry )agents, brokers, various middlemen, insurance companies, reinsurance companies, regulators)?

Did you ever hear of the story of Jim Clark trying to revolutionize the healthcare industry with a team of engineers right around the time the internet was taking off?  He and his team went to various branches of the healthcare system and offered them their software and gave their pitch about how the internet would streamline all the inefficiencies in the system....and they basically politely refused.

If the insurance industry adopts anything blockchain-related, I can almost guarantee you that it's not going to come in the form of someone creating a DAPP, an ICO, or anything else that comes from outside their fiefdom.  In other words, if they ever use a DAO or what have you, they're going to develop it themselves.

Second, have you noticed that there's seemingly nobody out in the real world who's made use of smart contracts or any other neat little thing that blockchain tech can do?  For huge industries, there either has to be something seriously broken in order for them to fix it, or a change would have to boost their profits massively.  Having said that, I couldn't tell you a thing about how a DAO would work in the insurance industry.  I'm not a big fan of that particular sector.

We're talking about a DAO here; a group of mostly anonymous people online. Sure you can sue if you want, but who are you going to sue? You're going to need to pay the FBI or something to at least attempt to unmask the anons; which will most definitely cost you a lot more than you could potentially get.

Lol.  And what you wrote is a great example of why companies haven't adopted crypto or even blockchain related features thus far, and it's been quite a while since bitcoin came out.

[michellee]

The insurance company wants your money and will always offer you some good return if you have trouble in your daily life. But unfortunately, when we are in trouble and need their insurance, they always ask for many things as the requirements to fill so they can pay the insurance money and that needs too long to be processed by them.

So I am not sure if DAO is the answer because the system is not wrong. But people behind that system need to understand that giving their responsibility to their members who claim their insurance is their work and their members do not have to wait for a long time to receive the money.

If they can fix their human resources and use their existing system or even integrate it with blockchain, that will work perfectly for people who want to claim their insurance because they will not wait too long. Hopefully, you can understand the real problem in the insurance company.

[cafucafucafu]

I think that there is serious room for disruption in this field.

DAOs can serve as fairer, more equitable and cheaper alternatives to traditional insurance just by way of getting rid of the middleman.

Plenty of people who want a return on their investment that is just marginally greater than bank deposit rates of peanuts, and plenty of people looking to get insured. And DAOs would make sure that over leveraged insurance doesn't happen by default as well.

[romero121]

Insurance industry contributes big to the economy. How can this be made more effective. In my country insurance scams can be seen very commonly. Here fake users were settled with the insurance funds as the documentation isn't cent percent legit. This is happening with the involvement of officials who are responsible in allocating insurance funds. Maybe DAO can do it without flaws as everything happens through the autonomous organization which doesn't fall under any control.