Overview of collaborative insurance initiatives
Does collaborative insurance speak to you?
Over the past few years, some 30 collaborative insurance initiatives have been launched around the world. All of them offer an essentially digital service and aim to reduce the cost of insurance. These start-ups are also all eager to challenge the industry’s historical players by significantly improving the customer experience.
For those who don’t know about collaborative insurance don’t panic: in a nutshell, collaborative insurance allows people who have similar profiles to come together in small communities to insure themselves in a more supportive, fair and transparent way.
If the members of a community have few or no claims at the end of the year, they recover part of their contribution. No more non-refundable insurance! Otherwise, the leading player on the French market, provides us with a visual representation of the founding principle of collaborative insurance:
The practice was developed in the United Kingdom in 2012 with the Bought By Many platform: the company promises a reduction of around 20% on subscribed insurance policies (health, car, home, etc.) thanks to the community connection (already 65,000 members).
On a smaller scale, Véronique Debue, deputy mayor of the commune of Caumont-sur-Durance in the Vaucluse (FR), created a village mutual insurance in 2013 enabling 293 of its citizens to benefit from a health mutual at a negotiated price.
Can collaborative insurance replace the traditional insurance model?
We are not there yet. Actually, some insurers are joining forces with collaborative insurers. This is the case of Generali, which has joined forces with Otherwise to launch a dog-cat insurance policy. Why is this interesting for Generali? This partnership is a lever for differentiation and allows the traditional insurer to invest in the field of innovation. According to Generali, “Collaborative insurance is particularly well adapted to this market and this new model has many advantages that will enable [them] to occupy an important place in it. “As for Otherwise, the company benefits from Generali’s historical positioning in this market.
While some collaborative insurance companies manage to build up a solid client portfolio, other players are not so lucky: this is the case of Inspeer, a French start-up company that used to offer a collaborative insurance product dedicated to electric cars, which closed in 2019.
According to Magdalena Ramada Sarasola, Insurtech Innovation Leader at Willis Towers Watson, “peer-to-peer insurance or niche products such as pet insurance are examples of promising ideas … but have not yet found their audience”.
Although collaborative insurance has not yet taken off in France, the success of the collaborative economy holds out the promise of a potentially promising future for this type of insurance as well.
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