Peer to peer insurance: why traditional insurers must wake up | Insurance Business

The following is an opinion article written by Veselina Milanova and Peter Maas, Institute of Insurance at St.Gallen University.

All for one and one for all is the mechanics behind peer-to-peer insurances. Will they disrupt a centuries old industry?

Sharing everyday objects such as drills and cars, lending money to other people, offering small services like cooking dinner for strangers or teaching others some skills – the list of what people can do within the sharing economy is growing daily. A study of the European Commission records the accelerated growth of the sharing economy and quantifies its transactions in 2015 at 28 billion euros across Europe, up from 10 billion euros in 2013. The rise in both usage and transaction volume clearly shows that the sharing economy is here to stay.

Peer-to-peer insurance – old story told a new way?

One of the niches of the sharing economy directly touches the insurance industry. Sharing an insurance policy with other peers still seems awkward at first glance. However, it feels natural when given a second thought. The origin of insurance dates back to the ancient world. At that time groups of traders collected premiums to cover risks related to the shipping of their goods. This form of mutual aid has been formalized in insurance policies as known today. On the one hand stock listed insurance companies offer insurance protection, on the other hand mutual insurance companies are the legal form of such a consumer cooperative.

via www.insurancebusinessmag.com