Interesting article about decentralized insurance + community follow up

Decentralized Insurance

community discussion about the article

` by A Cohe I get the design. But this makes a few inexplicit assumptions:

  1. oracles incentives properly align interest. Relatively easily for parametric claims triggers, much harder for most traditional/existing products. I still don’t understand pricing. Perhaps commission an actual study and release to the pool so they can assess themselves?
  2. the insurance buyer needs to understand the security of the pool. I’m assuming the pool isn’t fully collateralizing 100% insured value, so this is a sensitive assumption. Graphic suggests .67 prem to surplus ratio, which might make sense when at scale, but not from day one (obviously being generic here bc lots of factors into p:s ratio)
  3. assuming any dip holder cares to actually understand this stuff, I suspect they’d be underwhelmed by the true economics available to the staker. If the staker gets rich, it’s at the expense of the policyholder. The policyholder doesn’t like to buy overpriced product `

`By Christoph
well you can’t eat your cake and have it. You cannot have huge profits and at the same time a competitive product. You won’t buy insurance in the same way you buy a Tesla. Insurance is not sexy, and the math works the same for everybody.

So how can we be different? Just some ideas…

  1. Efficiency - (fully) automated processes.
  2. Accessibility - open markets for products and risk pools.
  3. Composability - on blockchain, insurance can be one crucial building block for future composite financial products.
  4. Machine-to-machine insurance, i.e. smart contracts which automatically purchase cover from insurance smart contracts. This is just a special case for 3)
  5. Liquidity - the amazon and ebay effect. It was always possible to sell stuff online but amazon just created this huge and unified marketplace.`

Please join in on this conversation, we like the community input!