Today we return to take care of DeFi, this time however from a more specific perspective, that of insurance companies; after all, the banks are not the only ones having to fear the rise of what many now call Web 3.0, among the companies that see their activity at risk from these new technologies there are insurances. So let's take a short trip through the decentralized platforms that offer insurance services and try to understand together how they work.

The VouchForMe Social Proof

The concept behind this decentralized insurance is as simple as it is unexceptionable, insurers assess the risk on the basis of statistical data which, however, describe the behavior of the mass and not that of the individual; trivially I could live in a city where everybody does so many car accidents and then find me pay a higher premium for the RCA, but maybe I am a prudent driver and unlike all the others I have never done accidents. With classic insurance despite my conduct being impeccable I would find myself paying more because of the misconduct of all others; here VouchForMe intervenes, allowing me to assess my risk to people who know me directly (relatives, friends, co-workers, etc.), who will partially cover my insurance and will only pay in the event of a claim. More in detail what happens is that family and friends guarantee for you and this allows you to pay a lower insurance premium; obviously the premium will be lower the higher the guarantee given by the group that sponsors you. The day when, unfortunately, I had to make an accident, the costs are divided between those who have guaranteed for you (only for the amount that they agreed to risk) and the rest will be paid by the insurance premium. In other words, using VouchForMe, guarantor and contractor, enter into a legally binding agreement automatically generated by the platform and available for download which makes explicit reference to the policyholder insurance policy and defines when and to what extent the financial guarantee generates an effective obligation to payment by the guarantor to the policy holder.

The etherisc project, 360 ° insurance coverage

If in the previous case we dealt with car insurance, in the case of etherisc we are talking about a platform capable of protecting against any type of risk, flight delays, natural disasters, cryptocurrency theft from our wallet and for loans secured by a collateral in cryptocurrencies, as well as social security (ie life and disability insurance). This platform makes it possible to collectivize insurance profits, in practice what happens is that on the one hand there is the subject that is insured, on the other there are investors who deposit funds to obtain an interest; Therefore, Etherisc is not a decentralized insurance but a protocol to collectively build insurance products. With this new platform, therefore, anyone can create their own insurance products, saving on the premiums provided by normal insurance.

Conclusions

The new DeFi platforms for insurance coverage offer unique opportunities both to those who must subscribe and to those who want to invest; on the one hand they favor the reduction of premiums to be paid by customers, on the other hand they distribute the profits generated by the platform to all investors. The advantages, therefore, are distributed over all the actors involved, from customers to small savers; in a historical moment in which the rates offered by government bonds hardly exceed the cost of inflation, this type of platform returns to guarantee an acceptable return to small investors, those who with the products currently available on the market have the only alternative the mattress is useful since between costs, commissions, inflation and too low interest rates would inevitably end up losing money.

If you have come this far, thank you very much.

Furthermore, if you are interested in the DeFi topic I wanted to tell you that I have explained in more detail what it is for and in the context of the loans, respectively HERE and HERE

Thanks and see you soon!