InsurePal
Social Proofing the Insurance Space

Social responsibility is a powerful physiological tool that enforces social groups to follow certain decorum in a given situation. This philosophy is similar to that of an individual providing surety under a lease or rent agreement, guaranteeing that his confidant will not resort to fraudulence. Two entrepreneurs, Matt Peterman and Tom Volk, extended this proposition into an invoking mechanism called ‘Social Proofing’ and built a blockchain platform around this idea. InsurePal, the embodiment of Social Proofing, casts this ideology into insurance, allowing friends and family to vouch for the applicant’s social responsibility. Adhering to this principle, individuals are automatically forced to follow community guidelines in terms of driving and insurance regulations, which creates a socially beneficial ecosystem for the overall betterment. This concept is further strengthened by the flexibility of the blockchain technology, which provides a decentralized approach to social proofing.

The concept of social proofing is built on smart contacts within the blockchain technology with a diverse set of potential use cases. For example, consider a person applying for vehicular insurance. His friend can vouch or testify his application stating that the applicant is a responsible and safe driver, which in turn reduces the application premium substantially.

Peterman explains that this ideology can be applied to a variety of monetary transactions. He adds, “Any two business personnel can enter into a smart contract before making financial transactions. The smart contract is then endorsed by similar businessmen as surety or validation that their endorsees will not resort to fraudulence.” The endorser or the confidant that vouches for the application immediately gets reward tokens for his/her endorsement. In instances where the endorsee is held responsible for an insurance claim, the endorser is subjected to a penalty for the initially provided surety.

InsurePal’s reward tokens are known as IPL tokens that can be used for insurance claims or monetary exchanges. IPL tokens are envisioned at becoming a standalone currency for the insurance space, increasing in value over a period time. On January 16, 2018, the company issued a crowd-sale for the tokens where 201,000,000 units were sold out in one minute and 20 seconds, reaching 100 percent of the hard cap limit with $18,000,000 raised during the sale. With the help of these tokens, the company plans to diversify their blockchain-enabled platform for various insurance applications. InsurePal is working on the development of this platform for four different genres of the insurance space—car insurance, property insurance, blockchain business insurance, and healthcare insurance being the first iteration of InsurePal’s application portfolio.

InsurePal also allows each endorser to get a Social Proof Trust Rating to strengthen his/her credibility within InsurePal’s network. This approach helps creating an environment where endorsees resort to responsible commute and do not violate social norms to attain credibility. Leveraging this psychological proof of concept, the company provides a compliance network that allows insurance companies to employ the blockchain-based concept ‘Social Proofing’ to monitor and regulate insurance claims. At the time of unjustifiable insurance claims, the person at fault and his endorsers are penalized for the mishap or fraudulence. Insurance companies are greatly benefitted by this endeavor as cases of at-fault insurance claims would be directly addressed through the social proof concept, holding the endorsers responsible for unjust and irresponsible behavior. “This ideology enables the communities to be more diligent and responsible and help businesses grow by building trust amongst each other,” concludes Volk.