TL;DR — YES

My past blog posts were very technical and although this post has two very large graphics the goal is to make this post as non-technical as possible. The most common question I get is “ok so why do you need Bancor anyways, can’t you just use a vanilla escrow to provide insurance?” Great question! Yes you can use ordinary escrows for insurance but the claim payment that people get will not convey any information as to the current solvency of the policy. With Bancor every payment you receive tells you the current health of the communities solvency without requiring the policyholder to make any extra effort to educate themselves

If your claim is for 1200 USD it might be chopped into 20 payments of 60 USD over the course of 20 days. After checking the current exchange rate you see that 1 ETH is 600 USD. You then expect that you will receive receive 0.1 ETH per day. You are given 0.1 claim award tokens and after sending 0.1 tokens to the contract you receive 0.09 ETH or 54 USD. Now without looking at anything else you know that the community has solvency issues. Rather than waiting to see if other people will fix these issues you are incentivized to take some action yourself. You know that each successive payment will be reduced more and more until your final payment will likely be less than half of what you expected. The community has the tools to govern itself and everyone needs to be an active rather than a passive participant.

The first large visual shows you that insurance funds are divided up into different pools. Solvency isn’t a 1 or a 0 rather there are several levels of solvency as multiple pools containing reserves are drained by claim payments. They are as follows: