3 ms·

How does this differ from long-existing "mutual" insurance companies? A policy holder essentially owns a a share in the insurance company. Peer-to-peer automa

• notahacker 11y ago
  I'm under the impression the p2p insurance schemes are supposed to consist of small pools of peers supposedly closely-associated enough to be willing to evaluate each others' risks, whereas the mutuals tend to pool risk across larger groups and differ from other insurers only in that they share the profits with their policyholders. I suspect in practice the larger, more diverse pool of risks and knowledge of professional underwriters at conventional insurers (mutual or otherwise) will trump the "I know X, Y and Z are very good at looking after their possessions" knowledge of the P2Ps, but it looks like the P2P schemes tend to back up the p2p scheme with a traditional insurance policy (with a relatively high excess), so actually the p2p scheme is only underwriting a portion of the overall insured risk. Theoretically you'd then get the benefit of the underwriters' ability to assess and cover expensive and idiosyncratic risks and your own better position to assess your peers' behaviour.