Friendsurance, which was founded in 2010, says that 80 percent of its customers who went without property claims received cash back payments equal to a third of what they were paying in premiums. Guevara says pooling premiums policyholders can save 80 percent on insurance.
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Yet proponents of these insurance companies say it's not just policyholders who are benefiting from the social insurance model. Insurance companies stand to benefit as well.
Excluding health care, fraudulent claims in the U.S. cost $40 billion per year, increasing premiums for American families by $400 to $700 on average, according to the FBI. Yet, at least in theory, social insurance users would have a built-in deterrent against filing false claims—they would hurt themselves just as much as their friends in the insurance pool.
"It's a bit like Facebook in that you're connected through friends and that accountability goes a long way," says Tim Kunde, co-founder of German insurance broker, Friendsurance. "Insurance companies love us because people are happier, more loyal, and are saving tangibly." While it took some time, the company now boasts 60 insurance partners that are seeing high overhead costs, particularly on fraudulent and small claims, shrink.
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User growth at Friendsurance is rising at a rate of about 10 percent to 20 percent per month, which is good enough to get increasing attention from venture capital funds. Li Ka-shing's Horizon Ventures, known for investing in startups darlings like Spotify and Skype, led Friendsurance's round of funding in 2013. Now, the company is exploring where to expand next.
For Guevara in the UK, which offers auto insurance coverage of its own, the story is much the same. Growth has its founder confident enough to plan on crossing the pond in less than a year. Yet why is it that the model only exists in Europe so far?
Inspeer's de Broglie jokingly blamed the delay on America's distrust of European socialism. Kunde, however, said that "we just saw it as a chance to revive that very positive core insurance once had."
While all three of the companies' founders were surprised the social insurance model has yet to appear in the states, they were equally confident the system was poised to grow—regardless of how "socialist" the model may appear.