December 6th, 2017 at 6:38 am UTC · 3 min read
Insurance is one of the sectors that are not usually a part of blockchain discussion. One of the reasons is the industry is so tightly regulated that not many businesses can compete, as they have to undergo severe legal and financial procedures to prove their models` sustainability.
The other is its organizational structure, as it is an industry controlled by big corporations with rigid structure, meaning the entry point is extremely high. And the later, but certainly not the least, is the challenge of how to effectively apply blockchain in insurance. It is not easy to come up with a disruptive new insurance structure than can work as an agile self-adjusting platform, store information the ledger, offer cheaper insurance and attract masses, all at the same time.
However, InsurePal is set to do everything mentioned above. The distributed insurance platform has reinvented the science of social proof to work similarly as a third-party deductible in banking. This means that the policyholder will be able to lower the price of his premium with the help of his trusted contacts. In other words, his endorsers also accept financial responsibility in case the policyholder makes at false-claim.
The simplest application of social proof would be in motor insurance, as explained in their whitepaper: John`s best friend Mary knows his driving habits and therefore endorses him. For that, she gets and immediate bonus, whilst John ends up with a cheaper premium. If nothing goes wrong, that is pretty much it. However, if John files an at-fault claim, Mary is the one held liable.
Therefore, social proof is peer pressure put to good use: it motivates beneficiary behavioural patterns and changes groups, and even society for better without aggressively invading privacy. And, blockchain`s immutable record is an impeccable way to store the social proof into the ledger. As such, it can serve as an important sing of one`s diligence and can be used to gain benefits across various insurances and even across different industries.
One of the InsurePal`s most exciting use cases is definitely the insurance of blockchain business transactions. The team is convinced this type of insurance will bring in the missing trust among all the stakeholders and serve as an additional boost of the rising decentralized economy. Certainly, the platform also promises many interesting features to incentivize both, the engaged crypto users and those who have not yet meet with the world of crypto.
InsurePal team is 30 members big, comprised of experienced and renown insurance professionals and blockchain, IT and communications experts with a track record of successful projects; a PoC published on GitHub and, what is rare but very promising, an innovative solution that was filed for patent protection in US and worldwide. For more information, please visit their webpage or read their whitepaper and mark January 16 as the starting day of their crowdsale.