A former
Marsh actuary who launched a peer to peer insurance company in New Zealand has admitted even his simple model was too complicated to resonate with Kiwis.
The idea of
Chris Logan’s
PeerCover, as revealed in Insurance Business last year, was for groups of friends or family members to pool their insurance excesses across a range of general, health and life products.
It echoed similar concepts around the world, such as Friendsurance in Germany, Hey Guevara in the UK and InsPeer in France.
The logic was that because the groups knew the members, it would be more transparent and fair, and mean fewer fraudulent claims and less exaggeration on claims.
PeerCover’s income would initially come from a claims handling fee with broking being a service he could add later.
However, Logan has told
Insurance Business that while his idea garnered considerable interest around the globe, it was largely academic, and didn’t translate into take-up.
“I was optimistic because New Zealand is quite innovative, but what I was offering was not what they wanted. So it didn’t work.
“One of the reasons is that it’s new and different, but people were having to ask how this worked and that worked and there was quite a lot of explanation.
“If you’re trying to sell online you’re not going to be able to do that.”
He said the international peer to peer insurers he had been in touch with had seen a similar scenario.
There were a whole range of different variations on the same theme, from an IVF one to one covering electronics, or one in the Netherlands called Broodfonds which involves groups formed through the Chamber of Commerce.
Those who had had more success usually had other aspects to boost them – such as Friendsurance’s aggregator capability.
Logan said a lot of them were watching US peer to peer insurance company Lemonade very closely.
The NYC-headquartered start-up was founded by Israeli entrepreneurs Daniel Schreiber (formerly president of Powermat) and Shai Wininger (a co-founder of Fiverr) and has raised an incredible $13 million in its first round of funding.
Industry analysts have said Lemonade will ‘transform the insurance landscape beyond recognition’, describing it as ‘rare to find such accomplished founders tackling such a sizeable industry with such a compelling solution’.
Logan was more circumspect: “They’re trying to make it a bit more user friendly, so that there are fewer questions. But I think it’s still going to be a tough ask.”
Meanwhile, Logan hasn’t been sitting on his laurels.
He has been working on a concept combining crowdfunding with insurance, and is in talks with a life insurer who has shown interest in providing capacity.
And he has also launched a website advocating preventative dental plans called
halerhealth.co.nz.
But he hasn’t quite given up on PeerCover.
“Like a lot of people, I want the insurance industry to be more innovative, dynamic and sexy, and that’s why a lot of people grasped at the idea of peer to peer because it’s something new and different and it doesn’t come around that often but yeah, it’s got to work!
“I guess we’ll see what happens. If this Lemonade thing doesn’t work I think it’s pretty much dead and if it does work I think we’ll see a lot of copycats trying to get it to work.”
