InsurePal, a new peer-to-peer insurer offering lower premiums for those able to gain ‘social proof’ guarantees from friends and family, has successfully raised £15m in an Initial Coin Offering (ICO) to fund its UK motor launch in H1 2018.
The crowdsale for InsurePal tokens online sold out in one minute 20 seconds.
Key advisers to the company include former Direct Line COO Damian Arnold and Lloyds of London veteran Tom Manson.
Using the Ethereum blockchain platform as a technology base for transactions, InsurePal uses a form of peer pressure, or ‘social proof endorsement’, to encourage and sustain better behaviours – such as safer driving – among policyholders.
By accepting only risks that an endorser guarantees with a financial commitment, such as credit card details, InsurePal is able to offer a lower premium for the insured.
Endorsers are rewarded with tokens which may be used for their own discounts, sold or kept as an investment.
While social proof is not new as a marketing tool, it has never before been reinvented for the insurance industry.
InsurePal has filed, for patent protection in the US and worldwide, the approach of arranging an insurance policy with an endorser.
InsurePal is targeting millennials and tech-savvy crypto enthusiasts – these will make up 75 per cent of the workforce by 2023. Virality and social media play a crucial role in their buying decisions.
“Insurance is a $7.3 trillion stubbornly old fashioned goliath that could significantly reduce premium prices if its model could allow it to operate with lower risk clients,” said co-founder and CEO Matt Peterman.
“In the case of InsurePal, the social proof that benefits these responsible clients with big discounts also carries embedded value in its underlying IPL token currency.”
InsurePal’s motor pilot is expected to be followed by schemes for property, casualty, life and health.