Hacker News Reader

Comment by allendoerfer | Hacker News Reader

How is this more "P2P" than other insurance companies are? Non-profit, yes, but the mechanism seems to be the same. There is still a central pot everybody pays into.

I would like a non-profit that just pays back the spare money even more. I do not know how this would work with regulations. I guess in Germany this could be done through a "Genossenschaft", which Wikipedia tells me has an US equivalent called co-op. Would this actually work?

Edit: Realized that you could just grant discounts as there cannot be a profit anyway. Would be awesome to see several companies with the same model, first competing on prices and ultimately the percentage of the fixed fee.

View on HN

The structure you describe is called "Versicherungsverein auf Gegenseitigkeit" in Germany. They are the oldest kind of insurance and still occupy a respectable portion of the market.

Public social insurance is even more P2P than that as dues are calculated based on actual payouts. This is most pronounced in the mandatory worker's accident insurance where employers just pay their share (based on size and risk profile) of last year's claims in their sector.

The English term for that is "Mutual insurance" and they exist in almost any country.

According to the video ("The Science Behind Lemonade") linked on the homepage, it seems the key difference is this company take a flat fee while other insurance company "makes profit" from declining claim , so the Lemonade has no incentive to decline a claim which makes the claim process fast; and also they donate the extra profit to charity

... extra profit donated? Why would I choose that over lower prices?

That doesn't sound right -- a claim should be paid out or denied based on the veracity of the claim, not on the profit motive of the company. Sure, a for-profit company has extra incentive to vet claims, but so does Lemonade (since they dont want to be swindled).

Traditional insurance companies make their margins on the cash they have to hold on hand.

They're capitalizing on the lack of trust people have for typical insurance companies. Even though a claim "should be" paid out based on the veracity of the claim, I think there's a population that doesn't trust the insurance company to operate this way.

I'd agree with that. There's a general feeling that people are surprised when their insurance companies pay out/cover some big cost (like rot), rather than it just being part of life. That says something about how much we trust existing insurance companies.

It's generally difficult to find any form of funding/backing as a co-op, as it's far riskier when your sources of funding can't vet all the people who have legal power to push your organisation in a certain direction.

Not sure how to answer your question directly but perhaps you're missing a bigger point. The price and ease of use difference compared to legacy companies is huge.

Was not criticizing the company at all, just wondering why it calls itself P2P and whether my payback model would work.

Daniel from Lemonade here. Totally understand how P2P can be confusing as a term. What we mean by it is that we use each group's premiums to pay their claims, with leftover money going back to the group's common cause. To us P2P is a shorthand for: 'it's not our money'!

While I understand the sentiment it seems like a confusing message to put out there. With the "P2P" label when it's not a typical P2P model.

Reply on news.ycombinator.com