Peer-to-peer: a mutual interest

The arguably disruptive nature of peer-to-peer insurance is worrying more traditional players as it continues to gain market share. Intelligent Insurer investigates.

The concept of peer-to-peer insurance made headlines in late 2015 when US-based Lemonade announced plans to operate as the world’s first peer-to-peer insurance carrier, offering renters and home insurance to the State of New York.

The concept of a peer-to-peer insurance model had existed before this. A number of peer-to-peer insurance brokerage firms had cropped up over the years including UK-based Guevara, New Zealand-based PeerCover and German-based Friendsurance, the latter of which is a pioneer of sorts, launching in the German insurance market in 2010.

“In 2010, our founders realised that it’s not fair to pay insurance premiums year after year, even if you don’t have any claims,” says Friendsurance co-founder Tim Kunde. “So they developed the first peer-to-peer insurance model that rewards small groups of customers with a cashback bonus each year if their group remains claims-free.”