All About P2P and Community
Editorial by Hugh Terry
P2P Insurance – a label in need of a makeover
Welcome to our first edition of InsurTech Insights. In a series of monthly blogs, in collaboration with KPMG, we will be exploring topics of interest in InsurTech.
In this inaugural edition we look at Peer-to Peer-Insurance (P2P). I have rallied against the application of this term to insurance as “in extremis” it is very difficult to see P2P working in insurance without the involvement of a regulator. Why is that? The reasoning is simple – with P2P lending the risks of default are borne by the lenders (who are investors), whereas with a P2P insurance model the risks of default are passed to the consumer – hence regulatory involvement is inevitable. So at The Digital Insurer we have added the term Community to this theme – to capture the broader set of business models that are looking to create new communities, or engage with existing communities, and to provide insurance solutions tailored to the needs of each community.
Please explore the blog. My recommended reads are:
- Check out Rick’s second major article on Lemonade and follow their journey from self styled P2P startup to a more mature focus on customer engagement and build communities of interest
- Read the KPMG Corner and their view point on whether P2P is a sustainable business model
- Check out other P2P and community initiatives around the world at the end of the blog
As the world of InsurTech is moving fast we plan to update each blog to keep them up to date and relevant . Do send us links and info that you think are relevant to this topic to [email protected]
To be clear, I’m talking about Peer to Peer Insurance (aka P2P Insurance, not to be confused with P2P Lending). The thing about P2P Insurance is that we tend to focus on the ‘how’ and not the ‘what’. How the business model works tends to get more attention than what the business model seeks to achieve.
An often asked question is whether P2P will disrupt existing personal lines insurance markets? I do not believe that it will be disruptive in its own right, because I am not convinced that pure P2P models are scalable enough to become mass market insurers