Market Discussions

Hello there, I am the founder of Jita Insurance Ltd.

I recently started my corporation, with the aim of providing insurance to freighter pilots during the upcoming Burn Jita event. I saw this as a great oppurtunity to attempt something new in EVE, and would like to hear your thoughts on the subject.

More info can be found in this other post here

Thanks in advance

-Caroline Chell

Happy to hold all funds as a trusted third party if that's what it takes to get this startup over the line.

So 4 posts made, 1 like received, and a character made 5 days ago? LOL Goonswarm, you have to put in SOME effort. D-

In the interest of your own credibility, I'm sure you'd want to make your main official and most likely include an API key verifying it, wether it's public or a trusted auditor. No?

@Caroline

Having created an insurance product with Sencnes, I can speak to this. What we created allowed for an automatic deposit of funds, the easy purchase of insurance contracts, an automated process for claims, and a method to send funds to the customer within 24 hours (under 12 hours I estimated for 90% of cases). It was priced and packaged in a way that I felt was compelling and profitable. Between Sencnes and I...we sunk about a year and a half of planning and preperation into it if not more, not even counting the months I spent programming the website to support all this.

It failed.

Now, I'm not convinced that insurance as an idea is dead for all time - but believe me when I tell you that the hill is a steep one to climb. The environment right now for a pure insurance offering is such that you'll find very few customers; compounded by the fact that while I don't have a perfect rep, a majority of people do trust me (at least I think they do). You're a rolled up alt with no rep and no detailed plan - not evening mentioning the supporting tools/website to enable the capabilities and processes that such a business requires.

I've no issue with taking you up on the details, trust me - I've dealt with them before.

Thank you for this information. I am currently typing this on a phone, and I will get to responding to these a little later.

Thank you once again for your (and everyone else's) comments.

Waiting for Shar Tegral to start singing Jiminy Crickets song. "When you wish upon a star"

If Wishes were Horses...

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Because your window of time is short, you may be right - the actual risk may be lower than the perceived risk. That's what you're betting on. That actual risk (loss percentage) is a qualitative number that you've come to based on antecdotal evidence. That isn't a slam, I did the same thing because there is just so little good data available. The danger you face is not writing enough contracts to take comfort in the Law of Large Numbers (http://en.wikipedia.org/wiki/Law_of_large_numbers). If you haven't modeled out an acceptable loss ratio yet, you better do that ASAP. You need to understand the bet you're making and how tight your profit margin is based off your key assumptions.

So there are your first two problems; the unknown risk of actual loss probability and the risk of not having enough contracts sold to mitigate the risk a volatile rate of claims. Those are the same problems we had when we launched our insurance service. Careful readings of the Dev Blogs and Fan Fest presentations helped, as did underwriting the entire potential liability of the insurance contracts we sold. You could underwrite the contracts yourself by using a third party escrow service and your own ISK.

The underwriting is actually the easy part.

Problem is - most people don't see the value in insurance. It's an abstract idea that they seldom have to deal with and that's partially addressed in game already. It isn't clear to most people what the value proposition is...and you haven't tried selling the value proposition yet. You're probably thinking; "Hexxx, what in the hell are you talking about??"

Let's talk fungibility.

For example: the fungible nature of ship loss. You can have five shuttles and one insurance polciy; whichever shuttle gets blown up gets the claim. Much cheaper than buying insurance in-game when insurance in-game is tied to a single ship; you'd have to buy five policies to get that kind of coverage. Sounds like a great deal right? Maybe to us, but not to most of EVE.

Thank you very much for this information. I'm going to take a look at my numbers again, as I think they can be better optimized. As you said, there isn't much evidence to go on in terms of ship loss rates.

As for people valuing insurance, I think that they will want some sort of security during Burn Jita. That's just my theory, anyway.

I was referring to insurance companies in the real world. Large firms, especially in the health sector, maintain risk reserves orders of magnitude larger than that paper suggests. While I agree with your use of the term "shoddy", that actually describes the vast majority of the industry.

Even with more reasonable risk reserves, the lag time between premium payment and insurance claim makes for some of the most lucrative investment capital in the world. Insurance is all about capturing interest-free loans.

If anyone is going to successfully launch an insurance service in Eve, they need to understand that.

Then they need to lobby Concord hard for an Individual Mandate... (I keeed!)

Oh, also... Science Financière?

That's cute.