KARL MARX may be dead, but a new type of socialism is rampant. Music, books, even cars—one industry after another is trying to use data gathered on social networks, in particular Facebook, to market and personalise their wares. One notable exception is the insurance business, which seems odd: Isn't an insurance essentially a social network to share risk?

This is the question that got Tim Kunde, an entrepreneur based in Berlin, to launch Friendsurance, a website that is now considered the pioneer of what one day may be called “social” or “person-to-person” (p2p) insurance. The idea is to more efficiently replicate for a group of friends what traditional insurance companies do for a large number of strangers.

Friendsurance offers household, personal-liability and legal-expenses insurance. Large claims are still covered by normal insurers, with whom the firm has partnerships. But the costs of smaller claims, which would normally be paid by a policyholder as part of a “deductible” amount, are shared within a small circle of friends, who can either sign up as a group or hook up on the site. Part of their premiums are set aside to settle these small claims. If something is left over at the end of the year, each friend gets back his share. “We are essentially insuring the deductible,” says Mr Kunde.

Take personal-liability insurance, a must-have for most Germans, who are among the world's best-insured people with an average of more than five policies each. German students pay around €55 ($71) annually to insure damages up to €10m. If five friends band together and none makes a claim, they will get about €24 back at the end of the year (the rest is kept to fund larger claims). Even with several small claims, there will probably be some cash returned.