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P2p Insurance

New finance ideas that bypass financial institutions
  (+1, -4)
(+1, -4)
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There seems to be quite a few new possibilities for regular people and small companies to bypass banks and enter into financial transactions directly with each other. Zopa and Prosper propose to establish a lending p2p market operating in different ways but trying to offer better rates than at the bank,for lending and borrowing, for similar level of risk. Following a post by Bobble, There is also a P2p foreign currency network in place, moneytwins.com , that allows people to swap their currencies notes. The main issue is to establish trust between members, but that is the same as on sites such as E-bay. Rigorous feedback and community building should make it work.

MAybe some time soon will we see emerging P2p insurance markets. The LLoyd's was supposed to be organised in such a way, but the membership is very complicated and involves to bring on loads of capital. There should be a company that would propose customers to apply to insure a particular risk. In a way, lending P2p is a form of insurance already, you get a better rate than the risk free one, but you have a risk that the debt is not repaid. So rather than limiting the risk to that particular class, the non-repayment of a debt, someone should extend it to more categories, all those covered by normal insurance companies.

fokoob, Jul 23 2006

Zopa http://www.zopa.com
[fokoob, Jul 23 2006]

Moneytwins.com, P2p Currency exchange http://www.moneytwins.com
[fokoob, Jul 23 2006]

prosper, p2p lending http://www.prosper.com
[fokoob, Jul 23 2006]

p2p insurance http://www.tankafritt.nu/uk/index.php
[kinemojo, Sep 17 2007]


       First, I think that "mutual" insurance companies are essentially a group of people agreeing to insure each other.   

       Second the principle of insurance is to spread the risk out among as many people as possible. If a large group of people is involved in this plan and one of them has a two million dollar claim the group stands a chance of covering it. If one person agrees to insure another (even if you have to have ten percent of the limit on hand) the chance of being able to pay such a large loss is small.
NoOneYouKnow, Jul 24 2006

       So you just establish a p2p network on the back end of an existing mutual insurance company. I don't think [fokoob] was suggesting individuals insure each other one-on-one. Seems to me this idea is probably inevitable at some point.
wagster, Jul 24 2006

       There is nothing in this that says banks are bypassed...   

       Why not just get a whole lot of people together and ask for a group discount...?
madness, Jul 24 2006

       "[fokoob], lemme... suggest... that you might wanna buy some House and Contents Insurance from me... 'Cos you never know when someone might break into your house, do you? Or if someone might accidentally feed your pet dog poisoned meat... yeah, so wouldn't you prefer to feel safer, sleep more soundly at night, knowing you've bought some 'protection'...?"
imaginality, Jul 24 2006

       @NoOneYouKnow , I don't suggest one individual should insure all of another's individual's risk. Rather there would be a pooling of risk across individuals. Say you commit to leave 1000usd on an account and 100usd would cover fire for someone, 100 usd would cover someon'e car, etc....on each tranche you would get a nice return, say 20 pc, and one of the events may happen, so you would lose 100usd , leaving you up 100usd after all.   

       @madness. They are bypassed because the rate paid by customers to individual insurers would be free of bank fees..   

       @imaginality ...??
fokoob, Jul 25 2006

       Isn't this what insurance companies already do i.e. spread individuals' risk over a pool of people? Essentially the insurance company just administers the whole thing, for which they get paid (by the pool of people).
Texticle, Jul 26 2006

       [phlish] it's a beautiful expression of the intricacies of finely balanced international commerce. Especially once you realise that few of the "high-street" insurers remain liable for the risk for any great length of time, preferring to sell it on to specialist reinsurers. These guys buy and sell insurance round and round between one another in ever decreasing circles, until it all finally gets dumped on a tiny outfit in the Cayman Islands, which, at the next mid-sized crisis event, promptly goes out of business. Poof!
zen_tom, Jul 26 2006


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