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Player driven ship insurance
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Mark Androcius
#1 - 2013-04-30 14:15:19 UTC
Not that i know exactly how it would work, but wouldn't it be nice if a big corporation or alliance, was able to sell insurance?

https://androcius.wordpress.com
Jonas Sukarala
Deep Core Mining Inc.
Caldari State
#2 - 2013-04-30 14:35:01 UTC
intriguing another revenue stream.... a spin off of trading...

say 20 people pay insurance rate set by that corp on specific ships.. so for example
- 20 rifters and the insurance is say 50k of the ships hull so 50x20= 1mil plus a brokers fee to the corp of say 10% sp 1.1mil
the only problem is if they all die and that corp would have to pay say 75% of the ships hull price
-20x300k 75% of rifters hull jita price for example) = 6mil.

mm... not sure if this is viable

'Tech3 ships need to be put down, like a rabid dog drooling everywhere in the house, they are out of line' CCP Ytterbium Nerf missile range into place where is the TD missile change?  ..projectiles should use capacitor. ABC's should be T2 HABC and nerf web strength its still too high

ShahFluffers
Ice Fire Warriors
#3 - 2013-04-30 14:50:11 UTC
The insurance system we have is not really insurance... it's a game mechanic to encourage players to go out and lose their ships.

And realistically... the people who use the insurance system the most are the same people that no rational insurance system would ever insure.

How did you Veterans start?
Bucca Zerodyme
Good For Nothing Corporation
#4 - 2013-04-30 14:55:34 UTC  |  Edited by: Bucca Zerodyme
insurance in real world is depending on the fact, that there are many who pay, but never get ever something back and some who pay the same amount get much more back, because something happend.

You cant count on that in EvE, because ppl in real life get insurance in case it got destroyed and want it replaced. In EvE its really easy to lose stuff. Usually ppl call insurance by another word "Ship-Reimbursement ", but only if you lose it in a fleet-fight.

If you want to get insurance to work, you would need to make some rules.
- PvE -> Low risk
- PvP -> High risk

And be aware of insurance-cheating.
Mole Guy
Bob's Bait and Tackle
#5 - 2013-04-30 15:18:37 UTC
or base it on how many times youve been killed.

the less u are killed, the less u pay.
Friggz
Caldari Provisions
Caldari State
#6 - 2013-04-30 15:41:26 UTC
Some players have looked into it in the past and the main problem is that the people who'd most want this are PvPers, and you'd be insane to insure pvp ships because the survival rate is so low. The rates you'd have to offer to make a profit would be so poor no one would bother.

The closest you'll see is Ship Replacement Programs, and that is because those are a service, not a business.
Danika Princip
GoonWaffe
Goonswarm Federation
#7 - 2013-04-30 20:52:46 UTC
Mole Guy wrote:
or base it on how many times youve been killed.

the less u are killed, the less u pay.



Have you ever had an idea that wasn't awful?
sabre906
The Scope
Gallente Federation
#8 - 2013-04-30 20:57:21 UTC
Jonas Sukarala wrote:
intriguing another revenue stream.... a spin off of trading...

say 20 people pay insurance rate set by that corp on specific ships.. so for example
- 20 rifters and the insurance is say 50k of the ships hull so 50x20= 1mil plus a brokers fee to the corp of say 10% sp 1.1mil
the only problem is if they all die and that corp would have to pay say 75% of the ships hull price
-20x300k 75% of rifters hull jita price for example) = 6mil.

mm... not sure if this is viable


Uninsurable? Encourage your rifters to not die.Cool

Remove the gaping isk faucet that is npc insurance and put in player driven real insurance.
Julius Rigel
#9 - 2013-05-01 00:22:47 UTC
Mark Androcius wrote:
Not that i know exactly how it would work,
Then why are you posting? No offence, but most people who come here want to hear intelligent, thought-out, viable ideas into which someone has put a lot of work.

Mark Androcius wrote:
but wouldn't it be nice if a big corporation or alliance, was able to sell insurance?
What's stopping them from doing that now?

In fact, there have been corporations and alliances who have done this in the past. Some of them fell prey to the greed of their directors, others just didn't get off the ground due to incompetence or lack of motivation, but there's nothing stopping you from trying.

Do YOU like to undock?
Ludis Drakava
Perkone
Caldari State
#10 - 2013-05-01 10:07:19 UTC
A player driven, risk based insurance system probably wouldn't work due to the massive amount of data and time/expertise required to compile the statistics required. You'd need a strong background in applied statistics (compound distributions, GLM, Markov chains/processes) and knowledge of how insurance companies work IRL (reserving, embedded value, insurance pricing, exposure to risk, grouping of homogeneous risks). There are probably a few people like that around in game (I'm one of them) but doing it from a player perspective would be like getting home from work only to go to work again!

The other reasons it wouldn't work is that most likely you'd be treated as a scammer or you would be a scammer to start with or you'd start an entire industry of people scamming you!

If CCP wanted to improve the insurance system in game it could be done using the techniques above to give things like:


  • No Claims discounts
  • Realistic T2/T3 insurance payouts
  • Suicide Gank insurance
  • Premiums based on where the ship is to be used (hi/lo/null)
  • PVP/PVE insurance


In terms of the economics of it, CCP would also have to balance how the insurance system works as an isk sink/faucet. It might be interesting to see how effective the in game insurance system actually is as a sink/faucet and compare the cashflows against how an insurance company would handle them IRL.

Overall cost/benefit to CCP & the player base... you tell me
Haulin Gneiss
Ministry of War
Amarr Empire
#11 - 2013-05-02 00:18:26 UTC  |  Edited by: Haulin Gneiss
Insurance is based on accidents

There are no accidents in Eve unless the game had "chance based accidents". Just the fact that you are flying a ship designed to protect against hostile action is enough to not make insurance work. They're supposed to die.

Furthermore, the insurance system isn't worth paying for once you reach T2 and T3 levels because the payouts are minimal. So all in...insurance in Eve, as stated above, provides a false sense of security which encourages you to willfully put your ship a risk because you know your losses will be offset by insurance payouts. The payout is not 100% of the replacement cost so the difference is a tolerable ISK sink that keeps you playing without losing all your ISK in one event.

In other words...players cannot make money because only the people that want to minimize their losses will pay for it. In insurance this is called adverse selection.

Now, if somehow the tenure of your ship, combat record, ore mined, etc would increase (similar to skill points on a player) you
Ludis Drakava
Perkone
Caldari State
#12 - 2013-05-03 12:05:32 UTC
Haulin Gneiss wrote:
Insurance is based on accidents

Nope, insurance is based on pooling quantifiable homogeneous risks in order to minimise the financial impact of those risks. From the insured's point of view it's about maximising the expected utility of wealth
Haulin Gneiss wrote:
There are no accidents in Eve

There are plenty of accidents in Eve (losing a boat to a disconnect, cat jumping on you at the wrong moment, falling asleep at the keyboard), however an accident is not the same as a random event. Every time a ship dies in Eve it can be viewed as a random event. These random events can be analysed leading to a better understanding of the risks involved for certain ship classes, levels of player skill, past history etc.

Haulin Gneiss wrote:
In other words...players cannot make money because only the people that want to minimize their losses will pay for it. In insurance this is called adverse selection.

If by "only the people who want to minimise their losses" you mean PVP'ers then yes, the current system is full of adverse selection as it doesn't distinguish between PVP and PVE losses. Same ship, much lower chance of having to payout for the PVE boat but the pilot pays the same premium. In reality everyone wants to minimise their losses.

If anything, the PVE market is the bit that player driven insurance could exploit as they could undercut or offer more than the NPC insurance especially for things like T3 ratting/mission boats.

You would still have moral hazard (ie the propensity to take more risks because you're insured) to contend with for all pilots but that's another matter. Adverse selection on the other hand can be minimised by pricing based on multiple risk factors rather than just cost of the hull.

Haulin Gneiss wrote:
Now, if somehow the tenure of your ship, combat record, ore mined, etc would increase (similar to skill points on a player) you

With enough data and expertise this could be possible, but as I said before I suspect only CCP would have that level of access to the data in order to efficiently do the statistical analysis required. I guess as a player you could data mine things like skill points, skill distribution and loss mails via the API & killboards but that would be time consuming without building a custom tool.

They've implied in the past that they can identify how long certain ship classes are flown for (the exposed to risk part of my original post), so I don't see why they couldn't implement an insurance system where the premium reflected the risks better