A brief look into the insurance industry
Insurance- in its essence- is a contract between an individual or entity and an insurance provider, arranged to guarantee compensation for the client’s losses by the insurer. Providers basically pool all the risks, receive small amounts of premium payments from each client, and use the gathered funds to compensate for damages suffered by clients. Not a bad idea!
Evolution of insurance in history
The concept of insurance has been around since 4000 BCE. Babylonian merchants formed bottomry contracts, under which loans were granted to merchants with the provision that if the shipment was lost at sea, the loan did not have to be repaid.
As communities evolved and got more complex, insurance became more sophisticated. In the Enlightenment era, more specialized varieties of insurance were developed, such as property insurance, business insurance, and life insurance. Travel insurance has emerged in parallel with the developments of commercial airlines. Health insurance became a necessity following the Great Depression and WWII. For example, Health spending totalled $74.1 billion in 1970. By 2000, health expenditures reached about $1.4 trillion.
The insurance industry has come a long way from its earlier practices. It is possible to buy insurance cover for almost anything in the modern-day. But the insurance industry is facing a huge problem: monopolization.
Lack of competition in the insurance industry is the number one reason many people cannot afford insurance coverage. Also, the customer friendliness of the traditional insurance model does not satisfy enough given the lack of transparency and complicated structures.
The future of insurance: Decentralization
In contrast to other traditional financial bodies, DeFi solutions are not controlled or regulated by a single central authority. The decentralized aspect is essential to a DeFi business model as centralized regulation can often limit the efficiency of a protocol — a centralized system is less transparent and has more control over users’ assets.
Decentralized insurance enables people to buy insurance cover for various assets and possible expenses caused by damage. Decentralization can change the insurance industry to the users’ benefit. Enabling premium payments using cryptocurrencies via blockchain technology, decentralized insurance accelerates the payment and claim process significantly compared to clunky and outdated traditional insurance payment methods. At CoverCompared, users can use cryptocurrencies (the mainstream payment of the future) to purchase various insurance policies at prices much lower than seen on other platforms.
CoverCompared, the first decentralized insurance marketplace, enables users to compare and purchase insurance coverage on a single platform using their crypto tokens. On top of that, to further simplify the insurance purchasing process and make insurance services more accessible, we removed gas fees associated with crypto transactions! Users can quickly compare and buy DeFi, health, travel, and electronic device protections in a few clicks.
CoverCompared is the First DeFi insurance marketplace for the global crypto ecosystem. We aim to lower transactional and administrative costs of insurance policies and coverage while providing high-value, cost-effective insurance products bought using a host of cryptocurrencies.
Our platform will be connecting users with multinational insurance providers for all global insurance products such as crypto-related protection, health, life, and travel policies. The platform will include a frictionless insurance marketplace experience incorporating next-generation blockchain technology and tokenized incentives.