Tuesday 01 December 2015

CommonEasy: the story of P2P social insurance

CommonEasy: the story of P2P social insurance Josef Steufer, CC licence https://www.flickr.com/photos/josefstuefer/6589762/

CommonEasy is the vision of two brothers, Jip and Florian de Ridder. These two twenty-somethings set out to create a model for collective social insurance that would transform the economy.

During his masters in Economics, Jip investigated self-employment rights in the Netherlands. He discovered that 80% of the self-employed in the Netherlands are not insured against illness or disability. The lack of state protection for a country with such comprehensive health insurance highlights how working individuals can fall outside of government policy and state welfare. With the self-employment sector being one of the highest labour markets in the Netherlands, Jip sought to create an organisation that would support individuals with creating their own social insurance policies.

And so it began. CommonEasy is a peer-to-peer insurance platform that utilizes the power of the crowd to collectively insure and protect material possessions, homes and livelihoods. Groups of people can create and manage their own policies for whatever they deem necessary and at whatever rates they see fit. This paves the way for a new form of collective, de-centralised, democratic insurance.

Here is how it works: Let’s say I want to insure my phone against accidentally breaking. I create a group on CommonEasy that insures phone breakage for up to €250 per month. I then invite my peers, friends and family to join this group. Everybody in the group pays a monthly amount via an online payment system, to contribute to a shared fund that can be used to reimburse anyone in the group who damages their phone. A digital bank account is created through MangoPay, who independently hold and guarantee the funds which can only be accessed with the whole groups consensus. Initiating a policy is as easy as that... but maintaining the group and creating a common consensus for issuing re-imbursements is when it gets a little bit more complicated.

Dealing with fraudulent claims is one grey area that highlights how difficult it is to maintain trust over online platforms. In one insurance group, an unfortunate individual managed to break their phone twice in one month. It was then up to the group to decide on whether they should receive the full reimbursement for the claim or be charged a deductible fee - that can be loosely translated from Dutch as a ‘Clumsy Factor’. In this particular case, the group decided to reimburse the claimant on both occasions (with a small Clumsy Factor charge of 7% on the second claim). This incident reveals the social mechanisms that CommonEasy rewards. You might assume that after the first claim, the group would reject the second to teach the individual an important life lesson and protect the shared funds. However, the CommonEasy social dynamic evokes a sense of empathy and common unity that builds on our very basic desire to help our friends and family. When formalised, this type of unconditional care that we offer to our loved ones can become a recognised form of collective insurance.

But, the sympathy that we offer our closest friends and family does not apply to everybody. I will be significantly less willing to pay towards a stranger replacing a cracked screen on their phone. The trust required for unconditional relationships are unique, in that they cannot be quickly scaled up to the masses. This presents an interesting issue in social engineering when scaling up the CommonEasy business model. Jip and the team have attempted to solve this with a numerical scoring (1,2,3) system for each new member to indicate the strength of relations between each member of the group. So, my mum may invite her best friend, who I may not know, but mum says is very reliable. I would then give this new member a rating based on the value of that recommendation. This enables the size of the groups to increase whilst retaining the integral trust between relations of the group. It allows for a business model that proliferates reliant and trustworthy relations – rather than the wide expansive and often thin connections between individuals on social media platforms.

Generally, insurance companies will calculate the cost of your policy against the risk of the anonymous masses, while CommonEasy calculates your insurance based upon friends and family who know you and can account for your responsibility. The possibility for asymmetrical risk sharing amongst people, without a profit-oriented organization getting in between, could dismantle the insurance sector, and, understandably, they are concerned. The collectivised protection that CommonEasy facilitates has the potential to radically reverse the economic model of the insurance sector and turn the exploitative business of insurance into a model of collective social security.

CommonEasy’s focus on utilizing existing social bonds to financially protect one another from risk is what makes it a platform to be genuinely excited about. We are surrounded by companies competing to disrupt economies with social business models that are engineered to maximize the crowd to increase profit margins. CommonEasy has engineered a platform that rewards strong social relations with financial protection and social security, and makes it a distinctively groundbreaking voice in the cacophony of crowdsourced economy.


CommonEasy is being presented as part of the Institute of Network Culture's Moneylab2: Economies of Dissent on 3-4/12/15 at Pakhuis De Zwijger, Amsterdam.

For more on CommonEasy, visit the website.

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