Tag Archives: insurance

The Insurance Industry Is Taking Advantage of the Sharing Economy

The so-called ‘sharing economy’ has benefited numerous consumers through the value it has added to their lives. Companies such as Uber, Airbnb and Lyft, to name just a few, have taken advantage of the digital technologies humans have developed over the years. However, consumers are not the only benefactors of the sharing economy, the insurance industry has developed products and services specifically catered to its unique characteristics, most notably in the ride-sharing sector, where insurance providers have taken advantage of liability concerns occurring in such ‘sharing’ activities (Traum, Vol. 14:511).

One of the first products developed, the “Metronome”, came from a collaboration between Uber and MetroMile. The device tracks the vehicle of a Transport Network Company (TNC) driver, and is embedded in the Uber application (Traum, Vol. 14:511). It only turns on and activates the required insurance plan when drivers are engaged in TNC services. When the driver is not carrying a passenger, or hasn’t accepted a ride, any liabilities arising from an accident are covered by his own insurance. This product considers both the professional and personal roles of Uber drivers. In a similar fashion, a new plan from Farmers Insurance, on offer since May 2015, supplements a TNC driver’s personal plan with a premium of eight percent (Traum, Vol. 14:511). Many insurances providers have begun to offer similar services to the ride-sharing industry.

Furthermore, the use of such digital technologies has expanded to mainstream customers’ insurance plans. Some companies have developed a chip to be installed on the vehicle during production. Similarly to the Metronome, this device tracks if a vehicle is in use and offers full coverage, to the extent of the customer’s plan, in the case of an incident. However, when the vehicle is parked and the engine is off, the insurance company provides a more limited plan. This enables insurance firms to offer their customer with a more suited, and personalised service.

In the case of Airbnb and other home-sharing services, the lack of legislative development with regards to the coverages of issues common to such activities (Traum, Vol. 14:511). However, insurance providers are aware of the risks that may arise but have yet to adapt and respond to liability issues specific to the home-sharing industry. Together with national governments and sharing economy companies, insurance providers have to strive towards addressing consumer needs; such as protection issues. Furthermore, innovations in this industry can be translated to insurance plans for the mainstream customer, taking the advantage of newly available digital technologies.

Traum, Vol. 14:511. Sharing Risk in the Sharing Economy: Insurance Regulation in the Age of Uber. Cardozo Pub. Law, Policy & Ethics J.

You cover me, I cover you


Eventually, every individual is obliged to join an insurance company to cover yourself for the costs of for example damage or injury. Problems of such insurances are, amongst others, the high premiums, even though you might not even need insurance that year and bureaucracy. Wouldn’t it be great if you were able to set the price, rules, premiums and claims yourself together with a group of people?

Teambrella is a platform that is designed for peer-to-peer insurance service and backed with Bitcoin. Users have exclusive control over all the aspects of insurance to make it fair and transparent and to cope with the inefficiency of current insurance services (Kastelein, 2016). Users are able to form or join teams of different sizes online to cover each other and in which each peer is both a provider and consumer. The teammates decide how risky each person is and pay according to that.

Schermafbeelding 2017-03-10 om 17.45.08

The framework includes a decision-making layer, which consists of a server for communication and voting, and a payment layer, which is based on Bitcoin technology. The voting process exists to make sure all users have mutual control over the insurance, including new members, risk evaluation, rules and processing of payments. It is also possible to appoint proxies to vote on your behalf, but you have the casting vote. When you pay more for other teammates’ claims, your vote weight grows. Bitcoin is used as a mean of providing coverage and payment of reimbursements in order to ease the burden of payments. Each premium payment is a partly reimbursement of a claim and these payments are enforced by distributed wallets that prevent spending that is not sanctioned by the other peers. After voting, the servers automatically prepare a set of transactions from these distributed wallets of the providers to the submitted claim of the user (Kastelein, 2016).

Schermafbeelding 2017-03-10 om 11.59.36.png

Efficiency Criteria
The utility for the consumers is the fact that it is easy to use and access is available anyplace and anytime. It is free to sign up and consumers have full control over getting certain claims funded. Besides that the investments are very low. Consumers are able to get insurance at low costs and keep all the invested money when no claims are submitted. Additionally, the providers are able to vote which claim to back, so they perceive all the incurred costs as fair and they only pay for trusted members. In this way, users will be willing to switch to Teambrella, because it maximizes the joint profitability.

Teambrella is feasible and takes care of several institutional arrangements. The platform is fair, because it enforces the Golden Rule of ‘treat others the way you want to be treated’ and it aligns every teammate’s interest. Besides that, the platform is transparent. You see where the money goes and every decision in the team is made by discussion and voting, so every user has control. Furthermore, the platform is affordable, because no middlemen are present (teambrella.com, 2017). Also, the platform takes care of several concerns about security, privacy, fraud, failure, hacks, scams and bitcoin volatility. Finally, the founders calculated several coefficients and ratio’s, which make the platform solid (Paperno et al., 2016).

Also the institutional environment is taken care of. No contracts, obligations or policies are present. Teambrella is no business of insurance, so does not need a license. Furthermore, Teambrella resolves conflicts through its own tool; the alignment of interests and standards of treatment.

Schermafbeelding 2017-03-10 om 17.45.16.png

Teambrella makes non-transparent insurance companies unnecessary and opens up a completely new field of trustworthy and demanded peer-to-peer markets.

Kastelein, R. (2016) ‘Teambrella – A Peer to Peer Insurance System Using Bitcoin. Retrieved from: http://www.the-blockchain.com/2016/05/09/white-paper-teambrella-peer%C2%AD-to%C2%AD-peer-insurance-system-using-bitcoin/, 10th of March 2017.

Paperno, A., Kravchuk, V., Porubaev, E. (2016), WhitePaper: Teambrella: A Peer-to-Peer Insurance System.

 https://teambrella.com, 8th of March 2017.