Author Topic: BitShares Insurance - Insure Anything (almost)  (Read 10802 times)

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Offline Akado

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http://bitcoinist.net/umbrella-holdings-insure-your-cryptocurrencies/ it seems it's the first insurance related crypto? Although centralized, just wanted to share it here, it might spark some ideas, who knows.
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merockstar

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Has a developer agreed to take this on yet? Is it something Invictus wants to develop or is it going to be a third party thing?

This is the single DAC I'm most excited about.

Offline unimercio

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 +5% agreed, the waters in this DAC are best tested on the most predicable risk. built in well established methods to assess risk  are essential to attract mainstream investor and promote adoption.
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Offline CWEvans

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Basically, the insured is betting that he or she will suffer some cost. Insurance works, because the cost is something the people will tend to avoid, like broken bones, wrecked cars, and such.

In the scenario above, the investors are betting that the insured are excessively pessimistic.

Isn't that what insurance companies do? They hope to collect more in premiums than they payout in claims. If you end up with reserves and the premium to payout ratio is more than 1, the "investors" or owners of the insurance company make a profit.

Agencies do something similar where they pool their premiums together and those who have less than a certain percentage of the premiums in claims get a profit and those who exceed the threshold get nothing. They are spreading the risk amongst more agencies for a better chance at steady profit.

If the insurer has fixed costs of anything greater than zero, then it must collect more in premiums than it pays out in claims.

The goal here is not so much to compete head-to-head with AIG, Allianz, or Allstate within OECD member states, as to bring risk mitigation to some of the six billion who live Developing World countries, and to those within OECD members states who do not have access to certain kinds of insurance.

My personal interest in this involves vendor credit guarantees.

Offline NewMine

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Basically, the insured is betting that he or she will suffer some cost. Insurance works, because the cost is something the people will tend to avoid, like broken bones, wrecked cars, and such.

In the scenario above, the investors are betting that the insured are excessively pessimistic.

Isn't that what insurance companies do? They hope to collect more in premiums than they payout in claims. If you end up with reserves and the premium to payout ratio is more than 1, the "investors" or owners of the insurance company make a profit.

Agencies do something similar where they pool their premiums together and those who have less than a certain percentage of the premiums in claims get a profit and those who exceed the threshold get nothing. They are spreading the risk amongst more agencies for a better chance at steady profit.

Offline CWEvans

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Basically, the insured is betting that he or she will suffer some cost. Insurance works, because the cost is something the people will tend to avoid, like broken bones, wrecked cars, and such.

In the scenario above, the investors are betting that the insured are excessively pessimistic.

Offline bytemaster

That is an interesting concept. 


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Offline NewMine

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Another thought:

Is there a way to have both an "insurance share" and an "investor share"?

Say 100 people want to buy 1 "investor share" each at $100 (using dollars because it's easier to visualize). You now added a $10,000 reserve to the insurance pot that also has all the monthly premiums. If total premium collected is $100,000, you now have $110,000 in the pool. If the claims for that month are $90,000 then $10000 is paid as a dividend back to the investors who now have a chance of earning money next month. Now if the next month you have the same $100,000 in premiums and $10,000 in investment reserves and the claims exceed $100k the investor gets no dividend. But if the following month $100k premium and $50k in claims, then $50k is split as a dividend to investors in the form of $5k each.

Of course these numbers could all be different and dividend payout could be a certain percentage of the unclaimed premiums, say 25%. That way it would add more to the following months reserve and so on....

You then could sell more shares each month that receive less dividend than the previous month so as to not dilute the original investors. Or only sell a limited number of shares per premium collected each month. And if premium drops, payouts will drop and investors could sell their share on a secondary market.

Is this possible?

Offline NewMine

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I see no way this could possibly work.

How can the market get enough information about an adjuster to evaluate whether he/she is fraudulent?

Sure it could.

Let's take car insurance. Comprehensive car insurance.

You rear end a BMW. You call the police. You get the police report. You send proof of car ownership, police report,  multiple estimates to fix both cars and proof of insurance before and after date of accident to 3 different paid "adjusters" or "arbitrators" (who never have to leave the computer) and as long as 2 agree on one way or the other, that decision is final.

For scratches or car hit by shopping cart you would need to submit verified/dated photos or videos of car before coverage began and then after damage plus estimates to fix.

Health insurance might be tougher since a Dr. Might not see you because he doesn't accept BTS insurance.

But you could do E.R. Insurance. Buy the insurance before emergency room visit. Send bill to multiple claims adjusters to analyze and make decision.

The only thing to get around is that you need to be able to force people to renew. You can't just have someone pay $100 worth of BTS insurance and be fully covered for life. So there might need to be some kind of burn or expiration to every share.

Does any of this make sense? Am I seeing this right?

Offline blackbeard

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The number of new careers that can be followed from a beach in Bora Bora is mind boggling.



Damn you, now I have an overwhelming desire to escape to bora bora

Offline onceuponatime


I see no way this could possibly work.

How can the market get enough information about an adjuster to evaluate whether he/she is fraudulent?

It could possibly work for life insurance where the outcome is pretty well beyond dispute. It might also be feasible in a small enough group where all the members are known to each other (say a church group).

Offline theoretical


I see no way this could possibly work.

How can the market get enough information about an adjuster to evaluate whether he/she is fraudulent?

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Offline santaclause102

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That's right. These DACs may cost a lot of jobs in the short term, all of them in the greedy and wasteful financial sector. But oh, the opportunities it will create! If we think eBay and the Amazon storefront created a lot of new chances for do-it-yourself businesses, we ain't seen nothing' yet! There will be many, many new opportunities for people to make great incomes...from anywhere in the world that's connected.

Agree, there will  be a lot of new oportunities and traditional careers are 20th century. But overall the gloabl tendency towards automatization combined with economies of scale (which is interconnected) will decrease the need for employees/working staff drastically. There will be very well paid individuals (those allocating capital and those maintaining systems) and a lot of unskilled unemployed and low skilled low paid people. The reason is simple. If the overall need for employees decreases there are more that can (and have to if they want to survive) do the jobs which dont need high qualification. The need for efficiency and the fact of competition in a free market plus the demand for profit will make employers pay the least possible price/loan for those jobs for which work force can easily be replaced.

So not everything is rosy for everyone but all this is part of a tendency ongoing since mankind began to cultivate land. Division of labour, individualization and automatization are all part of the same trend.
It is interesting to ask what this crypto/blockchain technology actually decentralizes in the above context (the one of the last sentence). It decentralizes a task to many suppliers (blockchains are secured through the efforts of many, ideally ;-) ; "adjuster speculators" are many and access the adjuster together) but blockchain technology and prediction markes centralize those tasks insofar as the individuals/machines that do theses tasks mostly do nothing but those tasks and have to specialize to survive in the competetive market they find themselfs in. Insofar decentralization is also part of that global trend. [This is a tendency; there surely are counter examples]

This trend can not be avoided given the prevailing conditions (free markets, population big/dens enough to allow it and require it, rational/material mindset fostering it (might not be a necessary condition)). But it will defenitely confront humanity with unseen challenges that are best discussed with an open mind. 

Offline pgbit

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If someone does go on holiday there, to the place above, and they profitably traded Bitshares whilst there to pay for the trip, it would be epic advertising. Obviously it would need to be an independent forum member, or possibly someone with no trading skills to emphasize ease of use. 


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Offline donkeypong

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That's right. These DACs may cost a lot of jobs in the short term, all of them in the greedy and wasteful financial sector. But oh, the opportunities it will create! If we think eBay and the Amazon storefront created a lot of new chances for do-it-yourself businesses, we ain't seen nothing' yet! There will be many, many new opportunities for people to make great incomes...from anywhere in the world that's connected.