InsurePal is a new entrant in the insurtech blockchain space. Its founders hope to become the internet of insurance.
What does that mean? Using a blockchain structure, and utilizing the unique capabilities of a decentralized trustless network, InsurePal aims to help identify a global community of low-risk clients. Utilizing “social proof” recommendations, users will be able to lower their insurance costs and earn money by referring and guaranteeing other users.
This will create a win-win for both customers and firms. Insurers will be able to dramatically cut costs of compliance and claims adjustment by identifying lower risk customers. And consumers will be able to earn money in the form of rewards and lowered premiums by financially underwriting the people they recommend.
We recently sat down with Matt Peterman, the CEO of InsurePal to have a chat with him about the project as well as finding out his thoughts and insights.
Hi, Matt. Thanks for joining us today. Can you tell us more about yourself and InsurePal?
For last two decades, I’ve worked in private equity and venture capital companies. Especially in the last 5 years, my focus has shifted on insurtech or, to be more specific, to fraud detection and underwriting for biggest insurance companies such as Allianz, Groupama, Fosun.
On the other hand, InsurePal’s co-founder Tom Volk is also a co-founder of company ADACTA, a leading European vendor for insurance core software, generating $25million revenue and employing 450 people in Ljubljana, Zagreb, Belgrade, Moscow, Brno and London.
As we have known each other for a long time, we decided to cooperate on finding an effective and agile solution for the insurance industry which is stubbornly resisting to change. We´ve designed an accurate mathematical model, calibrated on a real motor market data which proved us that the top 1% of the safest drivers overpay their insurance for a whopping 80% and the top 10% overpay for 70%. All this data served us as a confirmation that it`s time for a change, which we started with InsurePal social proof insurance on blockchain.
First off, why did you decide to use the blockchain in building InsurePal? Which element came first, Insurance or Blockchain? And how do you intend to ramp it up?
Blockchain is more than a technology. It comes with a premise we can do business differently, more transparently and most of all, fairer to the end-customers. It enables the emergence of new peer-to-peer services which connect customers through smart contracts without the control of a centralized institution. For that reason, it also gives them back the power to manage their own data and assets.
In the case of InsurePal, the insurance part came first. But, when we thought of the appropriate solution for the implementation of social proofing, blockchain seemed a perfect fit. Several recent successful projects in the blockchain space confirmed this is the right way of ramping up products and, we also have some “secret ingredients” to speed up the process itself.
“Insurance” is a big field…who are your key niche consumers and clients?
Key niche customers are good drivers/homeowners who represent from 10% to 40 % of the existing motor insurance industry. What is even more important is that our agile insurance platform will be able to enter a number of areas which large insurance companies don`t want to or even don`t know how to cover. This, in fact, means we`ll be the first serious player on the global market to offer solutions for business on the blockchain. And we know that the crypto economy is on the rise. By concluding strategic partnerships, we are actually setting the pillars of this alternative economy. This will accelerate the trading activities in this field and attract more and more individuals. So, our goal and also a challenge is to bridge the non-crypto with the crypto world and make the latter a safer and friendlier place for the end-users.
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Tell us about how you came up with the idea of Insurepal. Did you face a problem within the industry or do you think there is a gap in the market for Insurepal to fill?
After seeing a large amount of fraud, overpricing and bad practices when processing over $ 6 billion claims and policies, the idea came naturally. Insurers today are struggling to control their clients with big data, telematics, social media monitoring etc. InsurePal believes there exists a different, less invasive possibility to reduce premiums and claims by incentivizing clients and putting peer pressure to work.
What do you think is the biggest problem Insurepal will solve and why is the problem important to solve?
InsurePal restores power to an individual, allows the creation of groups of policyholders who trust each other and who, because of the peer pressure, commit themselves to a more responsible behaviour. All this means less risk for the insurers and more incentives to our customers. We also bring new insurance solutions and thus respond to the challenges of modern society by quickly adapting to the increasingly demanding consumer market.
InsurePal uses something which you call “social proof insurance.” Can you explain that in your best one-liner elevator pitch description?
If your policy is worth 100 GBP, that actually means you pay 60 to 70 GBP for claims out of it. Around 5 of 15 percent of claims are fraudulent. Another 15 GBP is lost due to premium leakage, or with other words for misstating customers` data. So, with certainty, we can say that the majority of policyholders overpays their insurance due to those who cheat the system.
You are teaming up with another blockchain legal-tech smart contract company. Why? And what will this strategic partnership create?
Our cooperation with Netis ltd. began 5 years ago. They are pioneers of blockchain with unique know-how. I´m certain our partnership brings about the disruptive potential to create a cutting-edge peer-to-peer blockchain technology and an ability to return private data back in the hands of the consumers.
Let’s talk about guarantors. What is the upside of financially guaranteeing another person on the network? Why do you think a private individual would be willing to take that risk?
For his social proof guarantee, a guarantor will be incentivized with a voucher of IPL tokens, worth of around 10% of premium savings. As you can imagine, we expect there will be a lot of mutual guarantees (husband to wife and vice versa).
From an insurance company perspective, even a small amount of financial guarantee by the guarantor is a good-enough proof to confirm an insured person is trustworthy. For example, 1.2 million of parents and their relatives in the US give yearly guarantees for their children`s student loans. The total amount of such loans is estimated at $ 165 billion.
What has been your happiest moment so far working on Insurepal?
Good question. Actually, most of them are related to the community response. We reached more than 895 million people with our online and media presence. I am just honoured and happy that the customers understand and approve the social proof insurance business model.
On the flipside, what has been the most painful, or perhaps the most regretful decision you’ve made with InsurePal?
Not fully committing to the InsurePal earlier! Nevertheless, the blockchain technology has not yet been ripe to deploy on such a scale 5 years ago.
Beyond your strategic partnership with a smart-contract legal-tech firm, do you have any other partnerships in the offing that you would like to talk about?
I would definitely point out our partnership with Vinay Gupta and Mattereum, giving us the tools for legal enforceability of smart contracts in 157 countries worldwide. At the same time, we were publicly supported by a large number of reputable experts in the field of insurance and crypto economics, which gives us motivation for further work.
How can tokenholders earn rewards and discounts?
They can earn rewards by introducing new clients or by processing small claims.
What do you think is the biggest challenge or obstacle Insurepal will face? How do you plan to tackle that challenge?
As always, our main challenge is global scaling and product adaptation. However, we think the time is ripe to bridge the crypto and non-crypto worlds.
Moving on to more personal stuff, what does a typical day in your life look like?
It means a lot of coordination, meetings, calls, trips and flights. At the same time, it also means meeting extraordinary individuals and working on a project I deeply believe in. I am also happy our team is so well synchronized and capable, so I trust them completely. This also means I can focus on issues and challenges of strategic importance.
Can you express one personal opinion of yours about the blockchain? It doesn’t matter if it’s negative or positive, we just want to hear your thoughts on it.
I always remember when I started to use the internet. Those wore the times of DOS. The majority of blockchain development is in a similar stage today, but I think it will have a similarly profound impact on our lives and the way we conduct business.
Finally, what other personal goals (besides your career) do you have in life? Is there anything else in life you want to achieve?
For personal growth, focus and inner peace are important. I like to meditate and reflect to learn from situations and try to do better next time. There are many effective ways for self-reflection and your country is a temple of ancient wisdom, so I look forward to visiting you more frequently.
That concludes our Interview with Matt Peterman
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