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The broker model for peer-to-peer insurance: an analysis of its value

Gian Paolo Clemente () and Pierpaolo Marano
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Gian Paolo Clemente: Università Cattolica del Sacro Cuore
Pierpaolo Marano: Università Cattolica del Sacro Cuore

The Geneva Papers on Risk and Insurance - Issues and Practice, 2020, vol. 45, issue 3, No 4, 457-481

Abstract: Abstract The increasing role of technology is generating new challenges in fostering innovative insurance products and in offering new means of distribution for existing products. Herein, we focus on peer-to-peer insurance, where technology is used to connect policyholders and the insurance structure recalls its roots based on organised mutual solidarity. The aim is to highlight strengths and weaknesses of the broker model of peer-to-peer insurance. We address the main legal and regulatory issues by referring to European Union regulation on insurance and we develop an actuarial model to support our conclusions and evaluate the convenience of such a business model for policyholders. Although peer-to-peer insurance was created as a fairer alternative to the pool of traditional insurance companies, we see major challenges that need to be solved. The evidence sheds doubt on the convenience of the broker model for peer-to-peer insurance while the regulatory risks seem, paradoxically, certain.

Keywords: InsurTech; Distribution of insurance products; Peer-to-peer insurance; Premium rating; Insurance broker; Insurance regulation (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1057/s41288-020-00165-8

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