$1,000 Grand Prize: Mitigating Risks to Vulnerable Populations

Peer Insurance Exchange makes insurance available to lower income groups

One way to lower insurance costs encouraging lower income population participation is creating a Peer Insurance Exchange which is a marketplace for customers to ask and receive insurance on the outcome of discrete events. Members can buy (also known as "insured") and sell (also known as "insurer") the outcome, and they can trade in real-time throughout the event, either to cut their losses or lock in profit. The exchange operator generates revenue by charging a small commission on the exchange, both when one pays for the purchase and again for the payout.

Sometimes Called "Platform Business Model", a two-sided business model is a platform for economic exchange between two distinct user groups that provide each other with the benefits of a large network. This describes how Silicon Valley tech giants Amazon, Alibaba, World Wide Web and Airbnb create and capture value. The benefits are time saved to find the service, customer loyalty and potential for exponential growth. A two-sided business model allows it to add increasing numbers of users in order to create a network effect when a product (like telephones) or a service (like a social network) becomes more valuable as more and more people use it. Facebook, Google search, eBay and dating services all increase in value as then number of users increases. The proposed two-sided insurance business model increases benefit as the number of participants increase. A Peer Insurance Exchange is a marketplace for customers to ask and receive insurance on the outcome of discrete events. For example, one user wants insurance that will payout $100 if their present doesn't arrive at their parents before their anniversary date. Another example, is one user wants insurance that will payout $300 if flowers don't bloom in the Spring after working all week planting a flower bed.

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Idea No. 2189