InsurePal, a new peer-to-peer insurer offering lower premiums for those able to gain ‘social proof’ guarantees from friends and family, is raising £15 million ($18 million) in an initial coin offering (ICO) to fund its UK motor launch in the first half of 2018.
Key advisers to the company include former Direct Line COO Damian Arnold and Lloyds of London veteran Tom Manson. The ICO will close on 16 January 2018. InsurePal’s motor pilot is expected to be followed by schemes for property, casualty, life and health.
Using the Ethereum blockchain platform as a technology base for transactions, InsurePal uses a form of peer pressure, or ‘social proof endorsement’, to encourage and sustain better behaviours—such as safer driving—among policyholders.
By accepting only risks that an endorser guarantees with a financial commitment, such as credit card details, InsurePal is able to offer a lower premium for the insured. Endorsers are rewarded with tokens that may be used for their own discounts, sold or kept as an investment.
InsurePal has filed, for patent protection in the US and worldwide, the approach of arranging an insurance policy with an endorser.
Co-founder and CEO Matt Peterman, who also works at insurance detection company Salviol, commented: “Insurance is a $7.3 trillion stubbornly old fashioned goliath that could significantly reduce premium prices if its model could allow it to operate with lower risk clients.”
“In the case of InsurePal, the social proof that benefits these responsible clients with big discounts also carries embedded value in its underlying IPL token currency.”