We are pleased to share with you our Detra Note 2021-2 on "Back to the future : moving insurance to the sharing economy".
This paper purposes to formalize the three business models dominating peer-to-peer (P2P) insurance: the self-governing model, the broker model and the carrier model. The former one develops outside the insurance market whereas the latter ones may originate from the insurance industry, by partnering with an existing company or by issuing a new generation of participating insurance policies where part of the risk is shared within a community and higher losses, exceeding the community’s risk-bearing capacity are covered by an insurance or reinsurance company. Such an offer thus benefits from the risk-bearing capacity and long-standing claim settlement experience by insurance companies. This new approach to insurance somewhat revives early mutual insurance, inscribing it in the sharing economy. The offer can fit into various ecosystems (such as car-sharing or connected health, for instance) and the ability to build alliances and partnerships with various communities is expected to boost business development. The participative structure can also be offered just as an option to existing insurance products, enriching the menu of individual deductibles with a new pooled deductible. The present paper proposes an actuarial modeling supporting the development of an innovative, collaborative insurance offer.