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Financing risk: prefund, postfund or both 

29/6/2016

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If you buy an umbrella when it is sunny, you probably are also a fan of insurance. However most people only buy an umbrella when it is raining and they see insurance as a necessary evil. The two approaches can be restated as: whether to prefund risk via insurance/savings or post fund losses via levies/borrowing? How risk/losses should or shouldn’t be shared is a separate question and is not addressed in this article but is addressed in this article.
 
So what’s the difference between prefunding and postfunding?
Prefunding obviously requires some estimating because when and how severe a loss will be is uncertain but less-obvious is that opportunity cost of investing in financial assets until monies are needed to pay for losses. Arguably prefunding is more forward looking, meaning there is a greater focus on risk management.
 
Postfunding is also a lot more transparent as the reason for the funding requirement is clear / there are less assumptions required. However, postfunding is less guaranteed because the source of liquidity may dry up when you need it following a loss. A liquidity shortage may be due to external events or the nature of the loss and the affect on you. One major benefit of postfunding is that there are less strings attached. Most insurance/savings scheme restrict payouts / how you can use the money. 
 
Some examples
Many discretionary mutuals and government insurers use a 100% postfunding i.e. subscriptions/levies are used to fund losses in the year rather than future losses where the underlying event occurred in that year. Donation based crowdfunding fits in this category.
 
Insurers offers a number of postfunding options to complement their core prefunding model. Examples include deductibles, co-pays, burning cost ‘premium adjustments’ and health savings accounts. 
 
Crowdfunding Cover is a genuine mix of both postfunding and prefunding. In return for regular risk-based subscriptions (prefunding), subscribers are entitled donation-matching of their life event crowdfund campaign (where donations are postfunded). An alternative name for this type of model is community coinsurance. What ever you want to call it – it is a entirely new way to finance risk. 

Take-away
Postfunding is a legitimate form of financing risk and is perhaps an approach you may very well want to consider.
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#insurchat (Europe/Asia) is boosting #insurtech through sharing

28/6/2016

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What is #insurchat?
A 30 minute chat session on twitter covering a different #insurtech topic each week.

When is insurchat (Europe/Asia)? 
Every Thursday: 9am GMT (London)
= 10am CET (Berlin) = 1.30 IST (Mumbai)
= 4pm CST (Shanghai) = 6pm AEST (Sydney)
​= 8pm New Zealand
Why have #insurchat?  
To boost #insurtech through sharing


​How do I #insurchat?

Just search #insurchat on twitter making sure you click on the 'live' feed
When you tweet, don't forget to include the word: #insurchat
Next weeks topic: Brexit, Borders & Scaling Startups (shared)
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InsurChat Europe/Asia
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InsurChat Americas
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Don't forget 'live' & include
#insurchat hashtag on all tweets
Any difference between #insurchat (Americas) and #insurchat (Europe/Asia)?
Same hashtag (#insurchat) only it is run 12 hours after the Americas session. The topics may be the same or can differ. The rest of world invite is orange whilst the Americas invite is blue.
​
Who's behind insurchat (Europe/Asia)? 
Currently sahoodk &  co-host the session but no ones really owns it - it is a collaboration of those interested in boosting #insurtech through sharing
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Different ways to deal with insurance fine print

21/6/2016

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Insurance policies are contracts, and like all contracts, many of the important items are often found in the fine-print. In the case of insurance policies, the fine print refers to the body of the contract where  and  are spelled out. (An exclusions is where the insurer won't pay, a sub-limit is where the insurer will only pay up to a certain amount for a specific risk and a limit is the overall maximum that an insurer will pay across all risks.)

Insurance companies limit their risk by specifying exclusions and (sub)limits. Looking for and understanding exclusions and sub-limits is especially important because they can be used to lower the premium of seemingly identical coverage from different companies.

Here’s an unsurprising fact: Very few people read the legalese terms of service contracts - less than one person in 1,000 (according to this Forbes articles). So what are people doing:
  1. Some blindly trust the fine-print based on their view on the overall trustworthiness of the insurer
  2. A common approach is to ask a friend who they buy insurance with, hoping they didn't use method 1
  3. Other people rely on online social networks e.g. BoughtByMany makes this approach easier by identifying groups of similar insurance buyers such as those with Crohn's disease (for travel insurance), or owners of French Bulldog (for pet insurance) etc.
  4. Or if you want an expert, you can always buy insurance through an insurance broker - they have a good knowledge of the differences in fine print and also how smooth the claim process is with different insurer. Of course you have to pay for this service either directly or implicitly through an commission.
What are most people are doing?

How do you deal with the insurance fine-print?

— PeerCover ()
Of course you can do all of the above but you may still find yourself beholden to insurance fine-print when it comes time to claim. That is why we invented a Crowdfunding Cover: 
  • broad supplemental cover to fill those gaps in your health/life/property insurances,
  • minimal fine-print (see our T&C's) without the legalese/medicalese,
  • your friends, family and others concerned about your welfare, decide how much we pay you
Get a quote today - it's cheaper than you think.
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#insurchat is boosting #insurtech through sharing

11/6/2016

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What is #insurchat?
A 30 minute chat session on twitter covering a different #insurtech topic each week

​​When is insurchat?
Every Wednesday: 2pm Denver = 4pm New York = 9pm London = 10pm Berlin = 8am Thursday in New Zealand
Why have #insurchat?  
To boost #insurtech through sharing
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Who's behind insurchat: 
Currently  &  co-host the session but no ones really owns it -  it is a collaboration of those interested in boosting #insurtech through sharing

​​Next week's topic: Brexit, borders & scaling ​(29 June 2016)

Topics to date:
  1. What's new in #insurtech (23 March 2016)
  2. Online vs bricks & mortar (30 March 2016)
  3. Startup playground, life, p&c, health - where do you play & why? (6 April 2016)
  4. Virtual hugs in online insurance: building trust among thousands (13 April 2016)
  5. Sharing success stories in #insurtech ​(20 April 2016)
  6. Blockchain applications in Insurance ​(27 April 2016)
  7. Wearable technology in #InsurTech ​(4 May 2016)
  8. Beyond personal lines, #InsurTech for Business (11 May 2016)
  9. P2P Insurance (18 May 2016)
  10. Building an #Insurtech Brand (25 May 2016)
  11. Facebook: Do's and Don'ts (1 June 2016)
  12. Insurtech: Is anything off-limits? (8 June 2016)
  13. InsurTech - Life (insurance)(15 June 2016)
  14. Rules - Regulation & Workarounds (22 June 2016) 
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