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Donation doubling - the modern day critical illness cover

31/5/2016

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Critical illness insurance (CII), otherwise known as trauma cover or a dread disease policy, is an insurance product in which typically pays out lump sum cash payment if the policyholder is diagnosed with one of a predetermined list of specific illnesses.

Rapid expansion of CII definitions however has lead some to associate this cover with playing the lottery or even a retirement plan (see "Trauma Insurance - Want to play the lottery"). This problem persists. One proposal is ​"life insurance solutions should be linked to impacts, not causation, and should provide benefits based on the claimant's outcome of an illness rather than just on the condition meeting a particular definition" - Gavin Teichner, general manager of individual life at Australian life insurer TAL

Diving deeper into medical or legal definitions to define further conditions or impacts is not the future. The world has changed. Peoples' trust in professionals, including doctors and lawyers, is at an all time low - so basing a insurance product around these professionals' decisions is a tough ask. Further, 'impact' is path dependent . For instance, there is a big difference between someone who has been diagnosed with cancer and another person, diagnosed with the same form of cancer but has also recently lost their job or even husband / wife. Can you really put your trust in an insurer to fairly make a call on how impactful your condition is? So what is a way to offer simple cover but still allow for impact?

Enter donation-based-crowdfunding. Donation-based-crowdfunding is being used by many to help fund costs of critical illnesses, severe injuries and even death. Because donations are made post event, donors can allow for 'impact' is a straight forward way. Unfortunately, most campaigns don't go viral, so you are dependent on your crowd - this often means only a small amount is raised. A crowdfunding insurance solution could remedy the shallow pockets problem by magnifying the amount raised - funded by pre-event regular premiums.

PeerCover is promoting such a solution (see how you can make it happen) but also offers a non-insurance approach based purely on gifting and transparency which anyone worldwide and take-up today. See here for more information.
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PeerCover Progress Report

27/5/2016

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PeerCover hasn't been successful to-date as publicized in this insurancebusiness article . There are a number reasons for this, which I thought I'd share with y'all:
  1. We were't able to team up with an insurer to offer a comprehensive solution - so it wasn't a '1 stop shop'
  2. p2pInsurance/sharing is easy to grasp at a high level but involves complexes at the more granular level. This is also true of insurance in general but people are starting from a better knowledge base for insurance. Complex products do not favour online sales.
  3. PeerCover's marketing spend was small. Whilst we were able to get some publicity this was mainly to other insurance professionals/more international than the local public
  4. Our UX wasn't great. We really should have built a reputation mechanism / allowed user to post profiles to facilitate sharing / forming groups.
  5. It may also be a local market issue. The chch earthquakes/insurer bankruptcies & GFC/failures of shadow banking industry are still fresh in people's mind. So locally people are weary to try p2pInsurance/PeerCover
Of course we are addressing these issues - so we are down but not out.
Feel free to comment below or privately  with your thoughts.
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