Andrew Cuthbert

Why Insurance Sucks—And Why It Doesn’t Have To Profit. Ninety-nine percent of businesses exist to make a profit. They offer a good or service, and in return they get paid. This is most definitely true for insurance companies. The more people sign up for insurance, the more money exists in the insurer’s ‘pool’. The more money staying in that pool, the better. Paying out claims means there’s less money to profit from in the pool. You can see where we’re going with this. It’s profitable to deny insurance claims. It’s the most basic business rule. Earn more than you’re spending and, hey, presto—you’re profitable. This becomes a problem when people claim more than they contribute, so you’ve got to keep claims low. Especially when you’re dealing with insurance fraud in addition to legitimate claims. And, at the end of the day, insurance fraud hurts legitimate claimants by subjecting them to drawn out claims processes filled with tedious verifications and unending terms and conditions. And guess what that means? Insurers aren’t your friend You’re paying a lot of money to a big company for a future situation that may or may not happen. Chances are that you won’t even need to claim, and then you may as well have taken all your payments and set a bonfire in your backyard. And even when you do claim, who’s deciding if you get your money or not? Picture this: you’re going to a party—a potluck-style event where everybody cooks something, you all pool it together, and everyone gets some food. But instead of you serving yourself, the host decides who gets what, and how much food they get. It doesn’t sound quite right, does it? Substitute your potluck contribution with cash and the terrible host with your insurance company and you’ll understand why people have so much distrust in the insurance sector. People even start thinking that maybe insurance fraud doesn’t sound like such a bad idea after all.​ ​They should also get an even piece of pie, and it’s not going to hurt anyone anyway. It’s a vicious cycle of necessity, resentment and doubt. But you’ve got to have insurance, because of the ‘what-if’ factor. What if someday I need that payout? What if my bike gets stolen? What if my pet gets sick and I can’t afford to pay the vet bills? ​What if my insurance company doesn’t pay? This shouldn’t be a concern. Insurance marketing is often based around ‘peace of mind’, but people are still worried they won’t be covered when they need it. And this all comes back to one thing. Conflict of Interest Your interest is in having financial cover when you need it most. An insurer’s interest is in maximizing profits. You have to believe that they will pay. You have to put your trust in someone who doesn’t know you and doesn’t care, and who decides behind closed doors whether or not to give you money. To make matters worse, they’re doing all this with the knowledge that if they don’t pay, they make more money. You’ve got to have insurance, but why can’t it be a better experience? That’s why we made Teambrella. Here are the basics Teambrella is an insurance tool that eliminates the insurer. All members of an insurance ‘team’ are responsible for insuring each other. The team decides everything using the Teambrella app. From a person’s risk profile, to how much they are covered for, to the legitimacy of their claim, to how much they are paid out—it’s all out there in the open for everyone to see and vote on. You and your teammates cover each other. It’s fair for all Teambrella not only cuts out big corporate, it connects you with like-minded team members that all have the same thing in common—risk. There’s no need for trust, because everyone is in the same boat. You’re all part of a team, you’re all insured, and you’re all insurers. There’s simply no conflict of interest, because everyone’s interests are aligned. Let’s get back to the potluck. If Joe only brings a cookie to the party, no one’s going to be very happy (people need to eat!) The same is true of Teambrella. If one person votes for a tiny payout despite evidence that the claimant needs the cash, next time that person needs money, the team’s probably not going to feel to favorable. No one likes a scrooge! Everyone wants to be treated fairly, and they do this by being fair to others. It’s the oldest rule in the book Treat others the way you want to be treated. It’s one of our founding principles. If you vote for fair compensations and risk levels of others, you can expect the same from them. Every team member balances out the group, and if they don’t, then it’s clear to see. Brad comes to your potluck but he’s got a terrible track record of burning his muffins—which he always brings anyway. What do you do? Politely decline the muffins. And the same goes for Teambrella. If you’ve got a track record of good driving with no incidents, you should expect a fair risk assessment. At the same time, you will give a fair risk assessment to others, because should you not, everyone will know who burned the muffins. Don’t be a Brad, and nobody will treat you like him (sorry Brad, your muffins are great!). It’s as clear as day The concept of fairness goes hand in hand with transparency—another area where Teambrella stands out. If voting was behind closed doors, there would be no incentive to vote fairly. We’d all like to believe that everyone is a good person, but the simple truth is that some people have a skewed perception of fairness. To paraphrase a phrase: everyone’s equal, but some people think they’re more equal than others. By putting everything in the open and having a trackable history, we’ve solved the problem of unfairness. How often have you questioned how insurance companies calculate risks, payouts, premiums and excess? It’s not transparent and it contributes to distrust. In a Teambrella team, you know your and others’ risk profiles, and you can vote on every decision. Themed teams = more empathy We’ve piloted Teambrella with four teams so far, and we’ve found that grouping common interests together creates an understanding between members. Aligned interests aside, empathy is the reason Teambrella works so well. If you’ve never had a pet, how can you understand the love that a cat owner feels for their animal? Grouping pet lovers together creates a community that’s based on empathy, which in turn reinforces fairness. If you’re in a group of bike owners, you’ll understand exactly what’s going on and you’ll be able to assess the situation from a place of knowledge. An insurance assessment is a very clinical process. Complex risk formulas and figures are used to get a result, often applied by people who can’t empathize with your unique situation. By moving the assessment to a team democracy, we’ve created a way for the process to be personalized and effective. Teambrella is the tool, but the decisions are made by teams. But what about the money? Where do the claims payouts come from? You and your teammates each have your own wallet which you keep topped up. When someone makes a claim, the payout is distributed according to each person’s risk profile and coverage level. It’s all done ‘automagically’, so all you need to worry about is making sure your coverage stays at 100%. The Teambrella app will suggest your top up amounts according to your profile, as voted by the rest of your team. There’s no insurance pool to pay into. The ‘insurance pool’ is a major problem with the industry, and by completely eliminating it, we’ve achieved what others haven’t, a fully-fledged peer to peer system—no middleman, and no conflict of interest. Think of it as paying premiums, except far cheaper, and you know exactly where your money’s going and who it’s going to—because you voted on it, and you’re kept in the loop from day one. If you bring a pizza and there are leftovers after the party, you get to take that pizza home with you. It’s the same with your money. No claims bogus Traditional insurance rewards you for not claiming. If you don’t claim after a certain amount of time, you may get some cash back. If you claim, then your premiums can increase. Everything is geared towards influencing you not to claim. This creates a fear of claiming, quite counterintuitive to the whole point of insurance in the first place. With Teambrella, there’s no need for any of that, because your money is only spent when there’s a claim. You’re in complete control of your finances, and if there aren’t any claims, you get to keep all your cash. We can’t profit from your claims What would be the point of challenging traditional insurance if we did the same thing as them? We’ve structured payments to be peer to peer, which means everyone in the team controls their own money, keeping claims resolutions simple. There’s no mysterious pool of money that everyone pays into, it’s all kept in individual wallets and only used when needed. This completely eliminates conflict of interest between the insurer and the claimant. We’re not an insurer, and we can’t profit from keeping your money in our pool simply because there is no pool. So, how will we profit? Back to basics. We’re a business after all, and yes, we need to make money eventually. We’re going to do it with a thing called proxies. A proxy is someone who can be nominated to make decisions on behalf of a team member. They can be nominated by many members at once, and they can vote on risk profiles, claims, and rules for all those members. They can be anyone, but should probably be someone you trust, and someone that knows what’s up. They should have knowledge of the insurance industry so they can make informed decisions. They are rated according to their decisions by the team members who choose them, which means that if they’re not performing properly, you can get rid of them in the same way you’d make any other decision on Teambrella—by voting. Proxies are optional, so if you want to make your own decisions, go right ahead. They’re there for ease of use and peace of mind. They provide a benefit to team members, and so they’re incentivized by gaining a form of compensation for each successful decision that they make. It’s a win-win situation. We make money by requiring proxies to purchase tokens. This enables them to offer their services within teams and get compensated for their expertise. It’s that simple. By removing ourselves from the claims process, we cut out the problem of traditional insurance. We’ve created a complex tool to enable the end user to cover themselves in a way that is free from conflict of interest. Teambrella aligns the interests of its users by creating a transparent platform that enforces fairness and empathy throughout the process. At our potluck, everyone gets a bite.