Let’s start with the basics, how do you see insurance in a tokenized economy?

We believe that the GDP of token economies will not grow significantly without insurance products because we have proof that in traditional economies, the higher the GDP per capita, the higher the percentage of insurance within that economy.

I also think that insurance can be a precursor for the mass adoption of innovation. For example, let’s look at innovation of self-driving cars. Do they exist? Yes. Are they on the roads? No. One of the reasons is that you can’t buy insurance for self-driving cars.

Similarly, there are products and services within token economies that have potential but we don’t think that they will achieve mass adoption without offering insurance for consumers who are risk averse. For these consumers safety is more important than new shiny things.

2. Let’s talk about one of your products: the Flight Delay Insurance. How does it work?

What this product does is provide cover for any kind of loss that you may experience as a result of a delay. For example, your business may lose income, or you may have hired a lawyer who is getting paid $500 per hour. This parametric insurance coverage provides the relief for those people who have high risks associated with delays. If your flight is delayed or cancelled, a claim is filed automatically and you receive either a completely automated payment within hours or after the flight has been found to be delayed by a data source provider, flight task for example (that’s one of the data sources we’re using).

3. Why are you using blockchain for your products?

This is a very common question — why would a product need blockchain? Sometimes it’s not evident but let’s look at an example. Let’s say you’re a scientist. You’re just a one-man shop, but you’re really good and you have developed a predictive algorithm. And then you have this deal where an insurance product will pay you everytime they use your algorithm to predict flight delays. They say that you will get paid $10 per policy or a percentage of revenue. Without blockchain technology you would have to trust them to send you reports once a quarter or month or year. With blockchain you can verify in real time how many policies they sold in any distribution channel. So you don’t have to work very hard to prove in court how much money you’re entitled to. Without blockchain, that would be hard to prove.

4. Going back to your products, do you plan to implement the Social Insurance product? [Social Insurance works as a protection against a risk of death or serious illness with an immediate emergency payment which helps to get through critical times.]

Deployments will only happen in places where the local governments or self-organized groups of people choose to provide a significant push towards bringing this to market. We will help them but we will not be the ones who actually develop it.

For example, we have a product called Hurricane Guard that is being built on the Etherisc platform by a group of developers in Puerto Rico.

This could be applied to existing projects, say in the Caribbean. For example, in the Caribbean, they have Catastrophe Risk Pools which allows countries to respond quickly to disasters such as natural catastrophes and virus outbreaks. What happens now is that you have is a combined pool of money, and if one country gets affected, they can draw from the funds.

What makes us different is that we are pioneering open source insurance products. Do you know any insurance company that takes on in open source in everything they have in their departments? Can you see GitHub of all the documents or codes or risk models? No. They are not incentivised to do it this way because their incentives are different, they need to maximize the profits of the shareholders.