Friendsurance has developed a peer-to-peer insurance concept which rewards small groups of users with a cashback bonus each year if their group remains claimless.
Policy owners with the same insurance type form small groups. A part of their premiums is paid into a cashback pool. If no claims are submitted, the group members get some of their money back at the end of the year. In the property insurance line the average cashback is 33% of the paid premiums.
In case of claims, the cashback decreases for everyone. Small claims are settled with the money in the pool. In the event of bigger claims, the standard insurance company covers any amount that exceeds the coverage through the group. In case there is insufficient money left in the pool to cover a claim, a stop-loss insurance covers the rest. As a result, policy owners always enjoy full coverage and never pay more than they would without Friendsurance.
Currently, the claims-free bonus is available for private liability, home contents and legal expenses insurances in Germany. It can be even added to existing contracts as Friendsurance cooperates with 70 insurance companies. These benefit from reduced fraud and increased customer satisfaction.