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Insurance Business: Rough idea - any interest for this?

Author
Solyaris Chtonium
#1 - 2017-02-13 07:14:34 UTC
Dear MD, \o?


Together with my good corp mate, we have an idea to offer a financial service that could benefit both the customers and investors to the program.

It is still rather early stage to disclose & discuss the full details on the forum, but I would like to see a) if there's some interest in this from potential investors, b) invite people to join the discussion, where I will send out a group memo/eve-mail to outline more details and progress the discussion towards actual implementation of the program.

While there are many rough ideas, the first one I would like to start with as our 'project' is player driven insurance program.

The idea is simple

1. The client buys an insurance program from the insurance corp

2. The client could be a single pilot, or a corporation or even an alliance (probably start small though)

3. The target for the insurance is freighters, citadels and ECs

4. The idea is that the Insurance Corp offers some degree of pay out in case the client suffers loss of relatively high-value assets of the above types

5. Each client will have his/her/their risk level assessed based on their past loss records as well as other variables that may come into play

6. When the insurance fee per month and the duration of the insurance is agreed between the client and the insurance corp, the insurance shall start

7. If the client loses his insured asset during the insurance period, the insurance corp will pay out the client according to pre-defined rate as agreed during the insurance contract phase

8. The main principle is that an early loss of the insured asset will not be a good option for the client, as the asset will not be fully covered until the client has paid X value of the insurance fee. This shall act as a basic means to prevent insurance fraud and also to ensure that the insurance corp can maintain good reserve fund that can be put into work to keep the capital growing

9. Aftger X months (or any other given time depending on the contract) of insurance fee has been paid, the client will find that he can enjoy the maximum coverage for his insured asset

10. After the insurance contract has expired, the client shall receive 100% + x% of the insurance fee he has paid during the period, effectively profitting from the insurance scheme as a form of slow-investment

11. The benefit for the insurance corp is that it can use the insurance fee income to engage in various other trade, production and investment activities, while keeping a safe buffer for early pay outs in case of loss for the clients (with limited pay out rate before X number of months has been reached).

12. Simply put, it could work like this - the Insurance Corp estimates that it can make 10% profit on its collected fund over the period of 6 months. The policy can be set up so that the clients will be paid out 103% of their insurance fee paid upon completion of the insurance contract. This leaves profit margin for the insurance corp over long term (just random numbers at this point)

13. Of course, one of the main issue is that the insurance corp needs to have enough buffer ISK to make this work, and to achieve this, I am willing to invest in my own ISK (+assets as collateral) but I would be happy to have other investors on board, who will get the cut of the Insurance Corp's profit while helping the insurance corp to maintain healthy reserve fund level + enough excess ISK to seize investment opportunities.

So in summary;

A) No insurance fraud. The most ISK a client can make will be if he does NOT lose his ship/asset and the insurance period runs its course to the end, in that case the client will make similar ROI as a common bonds found on MD, but without putting up a lump sum up front, instead he shall be putting in monthly payment as insurance fee. This is pretty good deal as a savings/investment

B) If anyone loses their asset deliberately to claim the insurance ISK, the time frame where the claimed ISK will be 'worth it' will be the time that the insurance corp has gained enough value from the monthly fees received, hence no loss for the insurance corp at that point. The loss value, NPC insurance rate, amount of insurance fee paid up to that point by the client, the insurance duration and all these factors will be calculated into the pay out rate

C) Multiple clients+big enough buffer from the investors should ensure that the insurance corp will run relatively stable, and generate steady long term profit, despite some sudden dips when big pay outs need to be made (but again, this shall be controlled as much as possible)

Anyways, this is the rough idea. We have already made some calculations on possible rates and such based on some randomly picked zkill loss records of various corps (just so we have some practical sample data to see what the numbers will be like), and I believe with variable rates, duration and coverage % it will be possible to run such an insurance corp that can benefit both the client and the investors.

As it is still very early stage and I'm just testing water, I will not disclose and discuss the calculations/formula here for now. But I would be happy to receive anybody's input on this as a general concept, and also if anybody would be interested in investing in such an insurance fund.

We can hold basic discussions here, and if there are sufficient interest from potential investors we could move the discussion to in-game mailing list, where the actual numbers can be discussed & put under close scrutiny, so that we can agree on the optimal value for the investors while keeping the insurance service an attractive option for potential clients.

Thanks in advance for your feedback.

Toobo

Cheers Love! The cavalry's here!

#2 - 2017-02-13 07:40:35 UTC
I can see your endgame here, and this proposal gets my Seal of Approval as a Highly Respected Business Acting With Integrity.

I support the New Order and CODE. alliance. www.minerbumping.com

Tactical Narcotics Team
#3 - 2017-02-13 07:52:31 UTC
Toobo wrote:
Dear MD, \o?


Together with my good corp mate, we have an idea to offer a financial service that could benefit both the customers and investors to the program.

It is still rather early stage to disclose & discuss the full details on the forum, but I would like to see a) if there's some interest in this from potential investors, b) invite people to join the discussion, where I will send out a group memo/eve-mail to outline more details and progress the discussion towards actual implementation of the program.

While there are many rough ideas, the first one I would like to start with as our 'project' is player driven insurance program.

The idea is simple

1. The client buys an insurance program from the insurance corp

2. The client could be a single pilot, or a corporation or even an alliance (probably start small though)

3. The target for the insurance is freighters, citadels and ECs

4. The idea is that the Insurance Corp offers some degree of pay out in case the client suffers loss of relatively high-value assets of the above types

5. Each client will have his/her/their risk level assessed based on their past loss records as well as other variables that may come into play

6. When the insurance fee per month and the duration of the insurance is agreed between the client and the insurance corp, the insurance shall start

7. If the client loses his insured asset during the insurance period, the insurance corp will pay out the client according to pre-defined rate as agreed during the insurance contract phase

8. The main principle is that an early loss of the insured asset will not be a good option for the client, as the asset will not be fully covered until the client has paid X value of the insurance fee. This shall act as a basic means to prevent insurance fraud and also to ensure that the insurance corp can maintain good reserve fund that can be put into work to keep the capital growing

9. Aftger X months (or any other given time depending on the contract) of insurance fee has been paid, the client will find that he can enjoy the maximum coverage for his insured asset

10. After the insurance contract has expired, the client shall receive 100% + x% of the insurance fee he has paid during the period, effectively profitting from the insurance scheme as a form of slow-investment

11. The benefit for the insurance corp is that it can use the insurance fee income to engage in various other trade, production and investment activities, while keeping a safe buffer for early pay outs in case of loss for the clients (with limited pay out rate before X number of months has been reached).

12. Simply put, it could work like this - the Insurance Corp estimates that it can make 10% profit on its collected fund over the period of 6 months. The policy can be set up so that the clients will be paid out 103% of their insurance fee paid upon completion of the insurance contract. This leaves profit margin for the insurance corp over long term (just random numbers at this point)

13. Of course, one of the main issue is that the insurance corp needs to have enough buffer ISK to make this work, and to achieve this, I am willing to invest in my own ISK (+assets as collateral) but I would be happy to have other investors on board, who will get the cut of the Insurance Corp's profit while helping the insurance corp to maintain healthy reserve fund level + enough excess ISK to seize investment opportunities.

So in summary;

A) No insurance fraud. The most ISK a client can make will be if he does NOT lose his ship/asset and the insurance period runs its course to the end, in that case the client will make similar ROI as a common bonds found on MD, but without putting up a lump sum up front, instead he shall be putting in monthly payment as insurance fee. This is pretty good deal as a savings/investment

B) If anyone loses their asset deliberately to claim the insurance ISK, the time frame where the claimed ISK will be 'worth it' will be the time that the insurance corp has gained enough value from the monthly fees received, hence no loss for the insurance corp at that point. The loss value, NPC insurance rate, amount of insurance fee paid up to that point by the client, the insurance duration and all these factors will be calculated into the pay out rate

C) Multiple clients+big enough buffer from the investors should ensure that the insurance corp will run relatively stable, and generate steady long term profit, despite some sudden dips when big pay outs need to be made (but again, this shall be controlled as much as possible)

Anyways, this is the rough idea. We have already made some calculations on possible rates and such based on some randomly picked zkill loss records of various corps (just so we have some practical sample data to see what the numbers will be like), and I believe with variable rates, duration and coverage % it will be possible to run such an insurance corp that can benefit both the client and the investors.

As it is still very early stage and I'm just testing water, I will not disclose and discuss the calculations/formula here for now. But I would be happy to receive anybody's input on this as a general concept, and also if anybody would be interested in investing in such an insurance fund.

We can hold basic discussions here, and if there are sufficient interest from potential investors we could move the discussion to in-game mailing list, where the actual numbers can be discussed & put under close scrutiny, so that we can agree on the optimal value for the investors while keeping the insurance service an attractive option for potential clients.

Thanks in advance for your feedback.

Toobo


This is probably one of the best ideas tbh. I see how this could encourage people to use their valuable ships for example. Big thumbs up for this. And as it is mentioned ny trusted MD active gets me exited 😃
Solyaris Chtonium
#4 - 2017-02-13 08:16:08 UTC
Thanks for the initial feedbacks, although it's still pretty early stage. :D

The idea is that for a small fee per month you could ensure some cash back in case of a loss, which should help ease the pain.

The longer you've had your insurance (i.e. you've made more numbers of monthly payments) the higher your pay out will be, and when the contract is over with nothing bad happening to your asset then it's like your savings have matured and you get a bit of interest back on top of the ISK you put in.

In mean while the insurance Corp has the fund/monthly income to run business, and what the corp needs to cover for will not be more than what it has received from its clients, and by the time the insurance period is over the corp has had enough time to use the capital to generate higher % of profit than what it pays back to the clients, which also opens up room for potential investors to put ISK into this to get that share of that X% profit.

So it's an insurance, but also kind of a pooling of ISK so that those who crash gets insurance pay out, and those who survive get profit in return, and the investors also get return on the % of the profit the corp makes.

If calculated & managed properly this should be pretty much a win-win for all. I may be missing something, and there are probably more details to be ironed out, and i'd be happy to see people point them out ot me here. I think with experienced people on board and good feedback this is something that can be done. :)



Cheers Love! The cavalry's here!

Gallente Federation
#5 - 2017-02-13 11:33:31 UTC
Need concrete numbers to give a judgement. From what I read, I don't see a big net payout being possible in case of loss. Your collected capital has to earn the guaranteed interest rate on the nominal PLUS the early payouts (insurance part). The scheme will only be beneficial for customers if the payout is significantly higher than saving the fees (to cover own loss).

I'm my own NPC alt.

#6 - 2017-02-13 11:44:52 UTC
Toobo wrote:
8. The main principle is that an early loss of the insured asset will not be a good option for the client, as the asset will not be fully covered until the client has paid X value of the insurance fee. This shall act as a basic means to prevent insurance fraud and also to ensure that the insurance corp can maintain good reserve fund that can be put into work to keep the capital growing


What sort of proportion of the value of the item are we talking about here? I ask because if it's too high, there's no point - the client might as well keep their money and self-insure. But if it's too low, you'll find it hard to turn a profit, when unlike a real insurance company you're paying back the premiums at the end of the term anyway, and only taking the money you make by having the use of that capital during the term.
The-Culture
#7 - 2017-02-13 12:02:40 UTC
What will be insurance payout if i destroy my ship/citadel/etc after X months + 1 day? Can i get profit off it?

I mean after X months from the start payout will be 100% until insurance contract ends. However i pay monthly fee. Not having numbers my best guess is that to get more off this contract (payment minus fees) one should try to get payment asap.

Is there something to talk about? Or i'm totally off the rails here?

The Mittani: "the inappropriate drunked joke"

Solyaris Chtonium
#8 - 2017-02-13 12:59:04 UTC  |  Edited by: Toobo
Good valid points & questions here. I have an initial rough calculation sheet from my mate that I will look up when I get to it for proper answers. At the moment though, yes, the 'balancing' of the numbers will be a key point here. It should hit the right point to make it worth it both for the customer and the insurance corp.

Having said that, although I shall dig out the recerence numbers when I get home (on mobile now), one thing I can say is that the terms and rates do not have to be fixed/same for all customers. This kind of business will not serve thousands of pilots (due to :reasons: i will get to that later). Fees/pay out rate/duration is probably best agreed on case by case basis, dependin on the nature and associated risk of the insured asset.

EDIT: just to summarise n add, yes the numbers and % will be important, and the corp should have standard reference figures. But at the same time, I do not see it as a go or no go for the whole project. Each customer can agree to the payment terms and amount that he feels is a good deal. For some X% standard may not be appealing, but there is room for negotiations to settle on % and figures that's agreeable. So while I could disclose certain figures here, it does not mean that the whole insurance idea is a no go because people don't like the numbers - they can be changed according to feedbacks on this thread, which I would welcome, and they can also be set according to individual requirement that an actual customer can be happy with. Some may want 100% coverage on loss, while others may accept 50% coverage and have plans to combine it with NPC insurance at their own cost.

Some assets may have bad NPC insurance pay out so our service may look more attractive than usual, while some other stuff could make more sense just sticking with NPC insurance. This would increasngly be more of the case if the value of the asset is in the cargo or structures or on unusual stuff (say, AT ships for example). One could lose 150b worth Chremoas and get a few mil back from NPC insurance, or could choose to do a program with us to cover for X% coverage. It will be a loss for the customer either way, but will ease the pain a little.

So yes, things will vary a lot case by case

Cheers Love! The cavalry's here!

Evictus.
#9 - 2017-02-13 13:55:39 UTC
For Citadel and EC, will you cover fits or just the hull? Rigs are a major component of the cost.

For freighters will you cover cargo/collateral or just the hull? A new freighter hull is covered 40% for 12 weeks free of charge. After that a 12 week basic insurance contract pays out 10 times the premium if you lose your ship - which isn't a bad deal. As a freighter pilot I was more concerned about my collateral than my hull. When I flew for Red Frog, WFI covered both - with a substantial deductible - as long as you flew within guidelines. Made runs through Uedama and Niarja a lot less stressful!
Tactical Narcotics Team
#10 - 2017-02-13 22:18:49 UTC
I would invest if - it is in the form of shares and month dividends are distributed, as a long term investment. If you're seeking investment as far as a loan I would also contribute possibly.

As for the idea I think it has merit, especially for items where in game insurance coverage is limited or not available for example if someone was hauling valuable assets in a freighter and wanted coverage for those assets.
#11 - 2017-02-14 04:52:00 UTC
So say i insure my ship with you for 1bil, contract term 10 months. I assume im paying you 100mil per month?

If i make it to 10 months i get my 1bil + x%?
If i lose my ship at 5 months do i get back my 500mil? or do i get less?

Solyaris Chtonium
#12 - 2017-02-14 05:47:28 UTC
Ok, I had looked at some numbers ran by a friend who's planning this together, and although my initial plan was to share this here I found that numbers are not so good and need to be rethought more before presenting here, although it is still at brainstorming stage - I want to start with plausible figures, not OMG that not gonna work figures. :p

So I will break it down like this

a) Contract Principles

1. Insurance Agent & the customer to discuss & agree on monthly fee and total coverage amount (in % of the loss value)

2. The coverage can be extended to cargo/rigs/mods (both on ships and structures), which shall affect the monthly fee

3. However, it is not expected that the corp shall not make any loss on every single insurance contract - there will be cases where corp makes the loss due to higher number of claims than anticipated

4. So if we look at an individual insurance case, it could happen that a particular contract with a customer leads corp to make substantial % loss on that deal (this is why it's difficult to find a good 'reference' number/scenario now, because an individual insurance contract can swing between decent profit for the corp to pretty bad loss for the corp, depending on what happens)

5. However, such risks are to be mitigated through having multiple clients, where it will be unlikely that over X% of these contracts will bring losses to the corp

This is pretty much similar to RL insurance deals in a way. I mean if I signed an insurance today and tomorrow got hit by a bus needing months of hospitalisation, then obviously I would be a big loss/failure case for the insurance company. That's pretty much what it is. :p However, such unfortunate cases are balanced out by bigger number of customers who are paying fees over long term without making major claims.

So yes, there WILL be risk of loss for the corp - this would not work if the insurance corp ruled out any possible loss on every single insurance contract, as that would make the insurance scheme non appealing for any customer.

b) Stop - loss measure

1. So this sounds a bit like a gamble (which pretty much it is at times heh), and every gamble needs a stop-loss strategy

2. As mentioned earlier, every insurance policy should probably include a stop-loss figure, that after the customer has claimed/received X proportion of the insurance fee he has paid (usually more than what he has paid) then the contract shall automatically become void - this will mean that the customer will receive more ISK than what he has paid, but the Corp also can be sure that the loss scenario will not exceed the amount it has evaluated as acceptable risk


I think the above clarifies what we intend to do. To answer some of the questions here

1. Yes, we would be open to extend the coverage to rig of structures and cargo of the freighters and so on - such things will add to the monthly insurance fee, but

2. As for the following practical Q from Cor,

"So say i insure my ship with you for 1bil, contract term 10 months. I assume im paying you 100mil per month?

If i make it to 10 months i get my 1bil + x%?
If i lose my ship at 5 months do i get back my 500mil? or do i get less? "

Yes, your insurance policy could be agreed to be that way after evaluation. However, at this moment I imagine our insurance corp will lean slightly towards bigger pay back at later stage. So for example, if it's 10 months contract, first month could pay out 5%, 2nd month 15%, and from 3rd month 30%, 4th month 40%, etc. So after certain period, the pay out would pretty much match the # of months you have been putting in the fees, such as 500m after 5 months you guessed here. Just saying that although this may be true, payout for the loss after 1 month may not be 100m, but less than that.

I try to work on more workable figures to present here, but thanks for the questions and inputs here so far.

I will update this post as we go along.





Cheers Love! The cavalry's here!

Solyaris Chtonium
#13 - 2017-02-14 06:07:34 UTC
Royce Catton wrote:
I would invest if - it is in the form of shares and month dividends are distributed, as a long term investment. If you're seeking investment as far as a loan I would also contribute possibly.

As for the idea I think it has merit, especially for items where in game insurance coverage is limited or not available for example if someone was hauling valuable assets in a freighter and wanted coverage for those assets.


Thanks for the comment and yes, it's those kind of scenario where it could benefit.

Long time ago I visited Daimler-Benz Aerospace centre in Germany, where they do R&D/engineering/some production for space rockets & such.

An interesting chat I remember with a guy there was that when they were launching a rocket into space they needed insurance in case something goes wrong, which could result in horrible loss (in many ways). What happened was that they struck a deal with an insurance company to cover for this potential disaster.

From what I remember, the one-off insurance fee was in the region of 10+ million Euro, and the potential pay out in case of the launching failure resulting in maximum loss (of life/assets/etc) was more than double that amount.

So basically, if the rocket launched and got safely into the space, the insurance company pocket 10m+ Euro 'out of nothing'.

However, if something went horribly wrong, the insurance company could end up paying out double the amount of what they've received as insurance fee. Shocked

I'm sure they had all sorts of analysts calculating the risk and structure the contract & etc to make it the best deal possible, but in a way that's pretty high level 'gambling' I thought. :)

But anyways, I digress - yes there are things that are not covered by NPC insurance. I gave an AT ship as an example, but there can be many more, like special cargo, rigs on a Fortizar, etc. I gave the Chremoas example as that's pretty extreme.

Let's say a team wants to field something like an Etana in their next AT. They could have it insured for 30b, with potential pay out (in case of the loss of the ship) being 50b ISK. If they fly Etana in their tournament matches and the ship manages to survive, then maybe they feel their 30b went to 'waste'. But if they do lose the ship during the tournament they know they would get at least 50b ISK in pocket, which won't get you another Etana but it's 20b 'profit'. At the same time, nobody would deliberately lose their Etana to make 20b ISK 'profit', as the ship's value is much more than that, both in terms of ISK and in terms of its uniqueness. It's a very specific example but I think this example shows there CAN BE a legit insurance scheme that are relatively free/safe from deliberate fraud/abuse, because it just doesn't make sense for the customer to lose their valuable/special stuff to claim the insurance pay out.

I think the same can be done with people who haul high value cargo or own structures with rigs that they have invested in heavily. Yes, they could 'earn back' more ISK than they paid for the insurance if these get destroyed, but there would be clear and legit cases where the customer would rather their asset stay safe & get some little interest pay back in the end. Many financial arrangements in EVE are open for abuse/scam with no consequence, and this is often the difficult part in establishing such services, but if a deal can be made where each party can say "it's good for me and it's good for you", then I think it's possible.

Mass scale insurance for the general public for common PVP ships and such could require a lot more administrative work and potentially needing to set up a system to facilitate easy application & tracking & etc. But specialised, high value insurance for something starting from freighter/capital level and upwards is probably something that could be looked at in good detail as a start for such venture.

Cheers Love! The cavalry's here!

Solyaris Chtonium
#14 - 2017-02-14 06:31:08 UTC
March rabbit wrote:
What will be insurance payout if i destroy my ship/citadel/etc after X months + 1 day? Can i get profit off it?

I mean after X months from the start payout will be 100% until insurance contract ends. However i pay monthly fee. Not having numbers my best guess is that to get more off this contract (payment minus fees) one should try to get payment asap.

Is there something to talk about? Or i'm totally off the rails here?


This question/issue can be addressed by differentiating the following terms

1. Coverage

This is the ISK value of what the insurance will cover, i.e. pay out in case of a loss from the customer

2. Expiry pay out

Not sure if that's the correct term in English, but you know what I mean - this is the amount that will be paid out to the customer upon the expiry of the contract, which is not the same as pay out for the loss

Both figures shall vary, and will increase over time, and reach 100% as you correctly assumed.

But of course the insurance corp needs to put in a measure, where you cannot claim for the loss (coverage) AND also receive the expiry pay out. I kind mention this in my earlier post about 'stop-loss' feature. I mean if the accumulated fee paid by you is 1.5b ISK, and you had big loss where you claimed 2b ISK, then the contract will automatically terminate - the corp shall write it off as a loss, and you as the customer has already gotten back more ISK value than you put in.

If you do wish to continue with insurance after such negative incurring loss/coverage pay out, then your monthly fee should probably be adjusted upwards to reflect this, just as it does for regular car insurances and such IRL. This could also affect your future application for the insurance, as you could be classified as a high risk customer and hence be quoted higher monthly fee for the same coverage.

I also talk in the other posts here (in response to Cor), the pay out % will be slightly skewed towards later stage, so you will not start with 100% coverage from the first month, and it will only be after X months (as you pointed out) that the coverage will be maximum of what has been agreed on.

At that point one could try to incur loss of the insured asset to make the maximum claim, but if the coverage was not set as 100% of the loss value it may not happen that you could 'profit' from losing your asset, and if the coverage was set as 100% of the loss value you've probably been paying decent amount of monthly fees - this could steal mean some loss to the insurance corp, but within the range that the corp can tank.

Most importantly, it will usually be in your benefit to not lose your asset and also receive the expiry pay out, where the combined value of your asset (stills safe and in your hands) + pay back from the insurance corp will be a nicer incentive than sabotaging your own asset prematurely to 'gain something from the insurance'.


It will mostly depend on case by case scenario, but above is the general approach I have in mind.

I can see how some people would quickly try to calculate and think of ways to insure their ship, get them to be blown up, and pocket some ISK changes on the difference between fees paid & coverage pay out, but in the grand scheme of things this will not be a major issue, because the following scenarios will apply

a) the asset you insure will be valuable enough to make it silly to commit insurance fraud with it for pocket change (see my AT ship example)

b) the asset used for insurance 'fraud' is not valuable enough to incur serious blow to the corp

Cheers Love! The cavalry's here!

#15 - 2017-02-15 08:06:58 UTC
Toobo wrote:
While there are many rough ideas, the first one I would like to start with as our 'project' is player driven insurance program.

Reposting myself from Pi Day in 2013... that's not meant to imply criticism, just bringing these old references to the fore:

Quote:
Previous discussions on insurance in New Eden go back years.

Some concepts are not applicable to this concept, but others are. In particular, there is the notion that it might be simpler to base establish an insurance business on 'investment income' (using your sale of an insurance-like product as a source of capital for market activities) and then later add 'underwriting income' when you have more data.

For some specific discussions that might be worth a peek:
http://community.eveonline.com/ingameboard.asp?a=topic&threadID=891931
http://community.eveonline.com/ingameboard.asp?a=topic&threadID=963638
http://community.eveonline.com/ingameboard.asp?a=topic&threadID=968566
http://community.eveonline.com/ingameboard.asp?a=topic&threadID=1123947

#16 - 2017-02-15 11:41:32 UTC
1) Have you taken into account that the client might blow up his insured asset with an Alt of his, thus his formula would be:
Buy cost + CCP insurance fee + Your insurance fee < CCP insurance payout + Your insurance payout + loot + salvage

I would therefore assume that your payout needs to be so low in order to make that formula not true. In which case the value of the insurance for "honest people" is only small.

2) Will you check if there has been fraud and then not pay out the insurance? How do you check that and who will be the one that does the verdict? An independent panel not directly associated with you and the client?

3) What guarantees do you give or measures do you put in place in order to minimize the risk of clients and investors that you are just running a pyramid game? Thus you operate the insurance for a couple of months for it to gain popularity and then run with the invested money and insurance fees.
Solyaris Chtonium
#17 - 2017-02-16 00:23:28 UTC
Thoraemnd,

Thank you very much for the reference links! I shall certainly check them all out in detail to gain better understanding of the history of this discussion.

Ethan02,

In EVE when insurance is mentioned people automatically think of insurance fraud, because well, EVE is like that heh. ;)

However, what you do say is pretty correct and is a legitimate concern. This is part of the reason that if we were to do it, we'd like to start with small/limited number of pilots and with relatively high value contracts, such as captails and structures. Both entities do not have great pay out (or not at all) in case of destruction, and for things like Fortizar and Engineering complexes it just won't make sense to have them destroyed deliberately to claim insurance pay out, as what will be lost is much greater than what may be looted.

The assurance part, for the investors, is that if we were to do this me and the insurance corp should put up some form of collateral that covers up to certain value. But yes, you could look at it as a pyramid game, because by the nature of financial business like this, the total value of the operation SHOULD exceed the collateral value at some point. In the beginning we may even start with over 100% collateral (which I've done before with bond and shown that I can put up 100b+ collateral), but if the whole amount of the insurance business is always going to be covered 100%+ with collateral than I may as well just do a straight loan/bond. I guess there should build a degree of trust & long term cooperation between the investors and the insurance corp that will bring it to higher level of value generation than what is covered by the collaterals, ultimately.



Anyways - thanks everyone for your inputs. I do like the insurance idea quite a bit, but it's just one of a few other more 'financial product' I have been thinking about & discussing with my mates these days. I think there is a potential, but I think the feedbacks here also point out some very clear and legit concerns that need to be addressed before the idea is taken any further.

I will look into this issue more and also investigate more on the past discussions, crunch some numbers and see what may be the best next step for this.

Cheers Love! The cavalry's here!

#18 - 2017-02-17 01:51:15 UTC
Dont listen to the nay sayer clowns of the market discussion forum, and dont be so concerned about collateral. I have borrowed literally hundreds of billions of isk from the eve community without collateral, you just have to market your opportunity.

! ! ! New Eden Trade Group is paying monthly interest to investors, contact me if interested ! ! !

If you already assume we are scammers without looking at what we offer objectively, go ahead and F*** off.

Thank you, that is all.

Tactical Narcotics Team
#19 - 2017-02-17 06:34:03 UTC
How i see this working. When you have something like rorqual where the hull cost of ship is nothing compared to the cost of fitting the ship. I would get a insurance for the fit with high monthly payments to ease the risk of losing. For example i could pay 10bn upfront and after that 1bn a month for the remainder of contract. This way at the start i could get decent amount of isk if id lose my ship at the start of the insurance. For the corp this kind of deals allows them to make decent profit early on. I dont see why this couldnt work. Ofc there is always people that will try to take advantage over these kinds of projects.
#20 - 2017-02-17 23:39:56 UTC
I don't know how exactly you would get this working - and considering it takes a while to get a full payout, I wouldn't be sure about actually purchasing such a service.

However, one thing I would be interested in is a rent-a-citadel program, where I can pay a monthly fee to have a citadel or EC (possibly shared) with whatever I want in it.
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