The document discusses reinventing insurance for a blockchain economy. It argues that while insurance is essential for distributing risk, current large insurance companies may not survive in a blockchain economy due to issues like high costs, misaligned incentives, and poor customer experience. As an alternative, the document proposes building insurance on blockchain networks, which could make the process more automated, standardized, transparent, and fair through the use of smart contracts. It provides the example of flight delay insurance and outlines goals for developing a decentralized insurance platform in the coming years to enable this new vision of insurance.

1. Reinventing
insurance
Stephan Karpischek
Etherisc GmbH

2. 4.000.000.000
*) Quelle: Gesamtverband der deutschen Versicherer
€ per year. One in five Germans views insurance fraud as a
peccadillo, which almost every one commits once. *)
The damage caused by insurance fraud is

3. The problem ...
Cost
Over-
regulation
Misaligned
incentives
Customer
experience

4. xIs there anyx
xalternative?x

5. https://fdd.etherisc.comhttps://fdd.etherisc.com

6. https://fdd.etherisc.comhttps://fdd.etherisc.com

7. https://fdd.etherisc.comhttps://fdd.etherisc.com

8. https://fdd.etherisc.comhttps://fdd.etherisc.com

9. https://fdd.etherisc.comhttps://fdd.etherisc.com

10. https://fdd.etherisc.comhttps://fdd.etherisc.com

11. https://fdd.etherisc.com

12. Data Provider
Oracle
A transparent, autonomous system
Code Data
Web-App + Wallet
Smart Contract

13. https://crop.etherisc.com
Same, parametric model applied to another insurance vertical

14. Etherisc Vision
Insurance on Bockchain will become:
● highly automated
● standardized and interoperable
● transparent and easy to audit
● provably fair
Product/Service
Development
Marketing
and Sales
Policy
Administration
Claims
Management
Asset
Management
Reinsurance

15. Decentralized insurance market
● https://etherisc.com/whitepaper
● Token model for investors to capitalize risk pools
● Whitepaper, simulation, first tests

16. Achievements so far
● Winner Blockchain startup contest 2016 (together with Status)
● Most funded project at hack.ether.camp
● Blockchain Oscar 2017 for “most innovative blockchain startup”
● Partnership with EY to explore regulatory landscape
● W1 Forward InsurTech accelerator

17. Realignment of incentives
Transparent Immutable
Zero
Marginal
Costs

18. A lot of big challenges ...
Legal
What is the relation
of a smart contract to
written legal
contracts?
Regulatory
Which regulatory
obligations have to
be met?
Products
What are interesting
business cases?

19. Legal
Can an autonomous Smart Contract
be a distinct legal personality?

20. Legal
Can an autonomous Smart Contract
be a distinct legal personality?
→ Currently: Most certainly not, yet:
→ It might happen (some day)

21. Regulatory
Are we moving in an unregulated
area?

22. Regulatory
Are we moving in an unregulated
area?
→ Big potential for “ex ante”
→ instead of “ex post” regulations.

23. Products
Who already has bitcoins today?

24. Products
Who already has bitcoins today?
→ No market penetration yet
→ Therefore: Lower the barriers,
→ build fiat bridges, educate
→ New markets: emerging markets,
→ microinsurance, insurance on demand

25. xA worthwhile goalx

26. Roadmap for a decentralized insurance platform
2017
BluePrint
2018
License
2019
Platform
Operational Model
Regulatory safety
Funding
Enterprise Ethereum Alliance
Acquire licenses
Implement infrastructure
First products
Development of protocol
Open-Source protocol
Sub-licensing
Empowering the network
...

27. Etherisc Token Model

28. Expected value of shared risks
Capital for long tail risks
Coordination costs
1
2
Etherisc Token Model
Risk Pool
Token
Platform
Token
3

29. Risk pool Tokens vs. Platform Tokens
Price determined by:
◉ Risk profile
◉ Duration
◉ Capital Markets
→ Financial Derivative
Price determined by:
◉ Quality of service
◉ Utilization of Platform
◉ Markets/Competition
→Entrepreneurial Risk
Risk Pool
Token
Platform
Token

30. How will the Platform Token work?
Product/Service
Development
Marketing
and Sales
Policy
Administration
Claims
Management
Asset
Management
Reinsurance
Insurance Company

31. Decentralized Platforms replace monolithic companies
Product/Service
Development
Marketing
and Sales
Policy
Administration
Claims
Management
Asset
Management
Reinsurance
Platform
Platform tokens secure the economical reliability of the platform (“Proof of Stake”)

32. Contact
Etherisc GmbH
Twitter: @etherisc
Web: etherisc.com
E-Mail: contact@etherisc.com

33. Image credits
◉ Roman Pohorecki
(https://www.pexels.com/de/foto/bergsteigen-gipfel-16714)
Riccardo Bresciani
(https://www.pexels.com/de/foto/abenteuer-action-aktion-aufnahme-von-unten-303040/
)
Diego Müller
(https://www.pexels.com/de/foto/abenteuer-klettern-bergsteiger-abseilen-97804/)
Pixabay
(https://www.pexels.com/de/foto/berg-bergsteigen-bergsteiger-dammerung-53484/);
All CC0;
Vince51
(https://commons.wikimedia.org/wiki/File:Rheinland-Pfalz-Biwak_b.jpg, CC-SA3.0)
◉ Google Slides Template © CCA SlidesCarnival

34. Reinventing insurance for a blockchain economy
● Will there still be insurances in the blockchain economy?
● How does the insurance business model look in a blockchain economy?
● Showcase: FlightDelay Insurance
Insurance is a core component of every economy. As an oil in the gearbox, they distribute
risks and thus enable businesses whose risks would be intolerable to each individual. Thus,
insurance companies have grown to the world's largest monolithic organizations. Will they
survive under the conditions of a blockchain-oriented economy? How does insurance look if
you reinvent them completely on the blockchain?
The example of a flight delay insurance shows how this works and what the consequences
look like for the industry.