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Wikisurance - The End of Insurance

Submitted by: mjd
Created: Mar 6, 2007, 11:51 pm

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Not freeish. Not freesque. It's free!

The Elevator Pitch

For everyone who wants to save money the Wikisurance: The End of Insurance is a web 2.0 service that uses mass colaboration to provide online insurance policies. Unlike conventional bricks and mortar insurance companies our product redistributes insurance profits to memebers!.

The Idea

Have you ever looked at the statistical probability of dieing, writing off your car or your house burning down? It's low, really low. We pay insurance premiums for events that have a statistical probability of never happening to us in our entire lifetime; and that's why insurance exists today and continues to be such a profitable industry. However, the biggest disappointment is that the premiums you are paying will never be recovered unless you are in fact part of the unfortunate minority - it doesn't have to be that way.

Individual premiums are purchased online and calculated using the same system used by conventional insurance companies. Funds are combined and then reinvested into secure investments. Claims have a deductible and are then paid out from the central fund. The remaining dollars (tot. premiums minus tot. claims) are then redistributed proportionately among members at the end of each calendar year. Profit goes in your jeans, not the insurance companies!

I thought of this idea when I was...

I bought an expensive car and looked at the economics of paying for collision (not liability) insurance. I am young and the premiums were high. I concluded that I would have to completely write-off the car every 4-5 years to justify my insurance premiums. I figured, why not take the premiums I would be paying, save and then reinvest them myself instead and then just use the actual cash in the event that I write-off the car.

Worst case scenario: I'm in the same spot as if I paid premiums. Best case scenario I have 4-5 years of insurance premiums that have been compounding annually in the bank. Woo!

Comments Posted

JET_KIRK Posted: March 7, 2007, 5:08 am

I feel sure that with enough gearing (participants versus risk) this could work fine.
Its a case, however, of the membership being available to service the hundred million dollar claim arising from a participant in the scheme directly causing an accident that derails a high speed train or causes an aircraft to crash and kill all onboard.
Insurance always has to cover the worst possible case. For that reason, they often rely on LLOYDS OF LONDON to be the ultimate 2deep pocket" for such outcomes.

Basically, your membership would cover their own and each other's liability. That's fine and I am sure that this could operate in some countries as a formal co-operative venture (which would be tax efficient).

If this scheme gets off the ground, then people will flock to it!

jill Posted: March 10, 2007, 7:41 pm

The red tape involved in the insurance industry might put the brakes on your original idea but I still think there is merit in taking a run at insurance.

Even if you just got everyone to post their policy details and their tales of dealing with insurance companies, it would be a great public service.

Insurance could use a lot of transparency.

Go for it!

Hashman Posted: March 16, 2007, 6:41 pm

This idea has its uphauls and downfalls. If you were to start the company right now and it took off, would you be able to insure your business? If many policies are written and scams take place that deteriorate your capital (each scam could be worth a lot of payout), how do you intend to protect yourself from worse case scenario? Besides that, its a good idea!

rep_movsd Posted: March 25, 2007, 5:39 am

How about verifying claims and preventing fraud? It needs a lot of thingummies to handle all the down to earth aspects like claims investigation, damage assessment etc etc.

KDawg Posted: June 10, 2007, 1:19 pm

I love this - I'm having issues right now trying to get home insurance. Even the brokers are looking out for my best interests by finding the cheapest rates, and many companies don't pay out after all those years of paying in faithfully.

Hello!

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