Peer to Peer Insurance: Dawn of a New Age?

Posted 31 December, 2015 by Clearly
in Opinion

A Recap of 2015


Looking Back 2015

Its always nice to look back on the old ole days


As we close out 2015 and charge headlong into 2016, it would be good to have a quick stock take of where we are now (for the insurance industry).

A quick recap of the year yields a surprising result: The Insurance industry hasn’t really progressed for the last 50 years. Barring the addition of comparison sites that gave people access to information, and also the advent of direct purchase insurance – we are still pretty much where we were 50 years ago.

Other industries have moved along by leaps and bounds. All by people who took matters into their own hands – the dawn of the peer to peer industry, as opposed to the traditional business model.


Dawn of the Peer to Peer Era


happy children

One of them might drive you to town, fund your start up, or even provide you with other custom services


Public Transport got shook up by Uber and its slew of competitors. No more at the mercy of shitty call bookings that [insert your traditional cab company] provided. People are stepping in to provide transport services and address the gaps left behind by the big companies.

Buying and Selling items took a new turn with Carousell – arguably one of the largest and notable peer to peer sales platforms. No more taking items down to cash converters for a joke of a return.

Even the way start ups raised funds took a whole new turn with Kickstarter, a peer to peer funding platform. Where previously founders had to rely on funding their own projects or muses, now the public at large can decide which ideas they think are worthy of taking a risk on.


What about Insurance?



To do or not to do, that is the question


The million dollar question here: Can we do the same for insurance? Life Insurance in particular?

Actually its already happening.

Sequoia Capital recently took a step forward in microinsurance — small, rapidly underwritten financial protection against a specific risk over a relatively short period of time. The firm recently invested in Lemonade, a startup focusing on bringing peer-to-peer insurance to the masses.


Reason 1 it will work: Consumer Behavior is changing



I consult my oracle before splurging on new curtains


We are wired up, connected, and live our lives online. A whooping 8 out of 10 of us will conduct independent online research before making a purchase. In this day and age, there is hardly anyone left who hasn’t made an online purchase.

Unlike the generations before us, who had no internet, we are comfortable with being connected – and getting things done online.


Reason 2 it will work: We have the data, and we have the technology



Search and you shall receive


Insurance works in the laws of large numbers – basically data on each age group, social behaviors, work place risk factors, etc. The data is already well established (in Singapore, at the very least) and its just a matter of replicating it on an online platform.

The technology of a peer to peer insurance model is also well within reach. SMEs are already being funded by casual investors putting in small sums – 500 dollars here, a thousand dollars there. What we only need to do is to tie it all together under an insurance frame work – how will the payouts work, what are the claims processes etc.


Reason 3 it will work: Traditional companies are just not getting the job done



I don’t really approve, no. Sorry.


For all their strength and might, the big insurers are just not getting the job done. People are still resistant to buying insurance. The average Singaporean is still under covered. Till this day, insurance still needs to be sold, as opposed to being bought out of free will.

A peer to peer platform will change all that. There will be no one that will sell you insurance, only people who want insurance will approach that platform. In a small way, we ( are spearheading this revolution by providing the education and information necessary for the general public to make their own decision.


Where the future lies


from the blog

Where will this road take us?

Our money lies on a new peer to peer model that lets people underwrite others, and also receive coverage if they so choose. There may be some stumbling blocks along the way, and regulators might fret (understandably so), but we think that progress is always one step ahead of regulation.

So who knows, perhaps in 2016, you might find yourself crowd-funding some other person’s Whole Life plan. How cool is that.

Do you think that will be a reality? Do let us know in the comments below! aims to eradicate the knowledge gap between consumers and Life Insurance. Our Vision is that one day, every Man, Woman, and Child will be properly insured.

  1. James

    I agree that there’s a great opportunity to disrupt the life insurance market. There are too many hidden costs (sales commissions, opaque admin fees etc) bourne by consumers in the traditional model. When a small country like Singapore has so many insurance companies setting up shop, it shows the large amounts of profits to be made.

    The P2P insurance model sounds interesting. But I’m not sure if it’ll take off especially when the P2P money lending market hasn’t really taken off here, which is less complex than the insurance market.

    1. Surely

      Interesting observation. At first glance, Singapore insurance demand may be too small but as mentioned by you, the amount of insurers may mean otherwise. It still remain as a possibility but legislation may be tricky.
      Actually for the consumers, it should be no different as buying direct from an insurer. Thus, it should not be trickier than normal.

  2. Sylvester

    I think the main hurdle is the underwriting and claim process. Special considerations must be given for substandard health condition, in the event of wrong health declaration, and most importantly, a smooth claim process. Frankly, traditional insurers are in a way, peer-to-peer too. All premiums are pooled together to make things work. Underwriters, claims departments, finance Dept etc are all set up to make everything possible, of cause, at a cost.

    1. Clearly

      Hi Sylvester, you hit the nail on the head. These are the difficulties that lie in the way of p2p insurance, but we have our money on that being solved, at least in the near future. Currently the SME p2p lending industry is the pioneer of such an endeavor, with similar risk / credit ratings to be performed. In our lifetimes, perhaps?

    2. Ck Quah

      Yup underwriting is the key issues. But I believe blockchain can solve the issue by recording health history or everybody. It will take a lot for peer to peer insurance to grow.

      Now most p2p insurance focus on non health related policies.

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