Insurance is all about people pooling resources together to protect against risk and uncertainty. It’s an industry that has been regulated to death – especially in the United States and in the healthcare insurance industry. The extra burden put on insurance companies often makes it more expensive than it should be and less responsive to customer needs.
Additionally, because of the sheer amount of red tape involved in the industry, insurance companies are often very bureaucratic and as a result slow to pay-out on claims and initiate policies due to extensive KYC laws and so forth.
Hi Mutual Society (HMS), a blockchain project of Qfund, the largest online crowdfunding platform in Asia, is looking to bring the efficiencies of blockchain tech to the insurance industry as a solution to these problems.
The startup has three different products: Global Health Mutual Support, Token Support, and Flight Delay Mutual. A decentralized risk pool for health, crypto volatility, and flight delay risk respectively.
These three products are aimed at different customer-bases in different insurance fields, but all are part of the startup’s current offering – launched in March and April of 2018.
With Global Health Mutual Support, people will be able to come together to hedge against illness as everyone in the group takes on the cost when a member gets sick. Thus, this mutual support group allows anyone to obtain a stable health risk protection plan at little cost.
In addition to this product, HMS also offers token mutual support that specifically targets crypto users and give them a way to protect them against large losses as a result of volatility. This plan gives users the option to protect themselves against falling and rising prices, depending on whether or not they want to minimize losses or missed out profit opportunities.
Finally, HMS also gives users a decentralized way of compensating users for flight delays (essentially protecting them against the risk of inconvenience and time lost due to the delay).
HMS could be on a frontier application for blockchain technology, as many people believe that it can and will disrupt the insurance industry. The most significant way it can do this is through the disintermediation of the industry — allowing users to directly form risk pools without a middleman insurance carrier coming in between them.
Another way is by streamlining ways to comply with financial regulations such as KYC laws by automating the storage of information required by law.
Blockchain technology could also make certain policies viable that otherwise wouldn’t be such as microinsurance, which protects low-income people from risks that could endanger their livelihoods.