Who are they?
Insurance is bought in much the same way it has been for decades. The only real difference is that we can now do it online and have the support of aggregators to help us find a good deal.

Tim Kunde, founder of Friendsurance, has bigger ideas. His entrepreneurial training and experience are being put to use, shaking up the industry by applying the principles of a social network to insurance.   Here’s his vision:

How do they operate?
With its social network grounding, Friendsurance offers peer-to-peer insurance through its partnership with insurance companies.

Here’s how it works; customers with the same insurance type are connected and their resources are pooled. If no claims are made by the customer or any of their group, they can receive up to 40% of their premium as cashback. As and when claims are made, the cashback decreases.

The rationale is that policyholders want to see a benefit for not claiming. Plus it promotes responsible and honest claiming behaviour by all policyholders.

What makes them different?
Besides incentivising consumers to be claims free, they are financed by a number of renowned institutional and private investors from the digital sectors. This means that they are a totally digital insurance provider. They also have deep relationships with over 70 traditional insurers, giving Friendsurance the heft needed to provide a full service.

A customer can purchase mobile, liability, household and car insurance online. All of their policies are easily managed online. Need to make a claim? Don’t call them, do it online. Sounds a bit silly to be touting this as a unique feature in our digital world, but it is. Have a look at this tour of their app to get the flavour (in German).

What does it mean for the industry?
The big insurance players are like cumbersome barges that take a great deal of time to shift towards a new direction. While many insurers are modernising, it’s no small thing given the mammoth task at hand with ageing platforms and aversion to risk that’s typical in our industry.

This is where start-ups like Friendsurance have an advantage. With a clean slate, they have an opportunity to begin at a standing start, winning business and gaining consumer trust, quickly. The model has been a proven success in Germany, and Australia has recently launched its first product with more to come, so it’s definitely one to watch.