P2P Insurance:
Peer-to-peer, or P2P, insurers put customers into groups based on a shared factor, usually the type of policy. The group’s members pool all their premiums, and payment for insurance claims come from the pool. The aim of P2P insurance is to make insurance cheaper and to reduce the inherent conflict between insurance carriers and policyholders at the time of a claim.
3 disruption factors which P2P insurance has:
- Building Power: Big names in insurance are throwing their weight behind P2P insurance startups like Lemonade. These new insurance companies in the fast-growing P2P segment are using crowdsourcing and social networking to create a shared insurance experience. More will follow their lead.
- Rebel Customers: With P2P, peer groups, such as owners of autos, houses and small businesses, buddy up to absorb each other’s risks, with all contributing money to insure each other’s losses. The startups promise a pleasant, powerful and even a little bit of rebel experience.
- Venture Capital: P2P startups have excited the venture capitalists by offering a technologically strong alternative to the existing insurance business model. By and large, their management teams generally are comprised of professionals formerly in leadership capacities with technology firms and insurance companies – fueling the growing category of InsurTech.
I surely feel P2P insurance is the way going forward. Crop insurance for farmers would be a very good application of P2P insurance. It would be a good solution for the farmers.
Reference: http://www.consultparagon.com/blog/peer-to-peer-companies-are-disrupting-insurance