Decentralized insurance based on a mutual assistance model

Cover Page

Cite item

Full Text

Abstract

the purpose of the study is to analyze the impact and future development of an alternative version of the centralized insurance industry, which is referred to in the scientific literature as decentralized insurance. Decentralized insurance, also known as blockchain-based insurance, is a revolutionary concept that emerged with the advent of blockchain technology. To analyze the gaps in the design of decentralized insurance products in the insurance market practice and theoretical models of risk distribution in the literature. And based on this analysis and analysis, to present the general structure of the mutual insurance model in healthcare, which could be used for development on decentralized finance platforms, and a mathematical basis for describing common properties. Also give a general idea of the concept of (de)centralization. stemming from the architecture of blockchain technology. The methodological basis of the research is general scientific research methods: logic, synthesis, analysis, induction, deduction, as well as an agent-oriented approach to the analysis of the insurance industry. Results. One of the approaches to the development of a model of decentralized insurance as part of a system of decentralized finance and multi-agent modeling of insurance interactions in the direction of improving their quality and safety is defined. Within the framework of the proposed model, it was found that the criterion for the effectiveness of its algorithm is low resource consumption to support the platform, the vector of work is generally directed towards policyholders, unlike centralized insurance, where it is directed towards the insurance company and all the properties are inherent in blockchain technologies. Conclusion. As this concept of decentralized insurance develops and matures, it can transform the insurance industry by empowering individuals and organizations to manage risks more effectively, while strengthening trust and accountability among participants.

About the authors

S. G Valentinov

Southern Federal University

References

  1. Catlin T., Lorenz J.T. Digital disruption in insurance: Cutting through the noise. Digit. McKinsey. 2017.
  2. Chen Y., Bellavitis C. Blockchain disruption and decentralized finance: The rise of decentralized business models //Journal of Business Venturing Insights. 2020. Vol. 13. P. e00151. https://doi.org/10.1016/j.jbvi.2019.e00151
  3. Zetzsche D.A., Arner D.W., Buckley R.P. Decentralized finance // Journal of Financial Regulation. 2020. Vol. 6. № 2. P. 172 – 203. https://doi.org/10.1093/jfr/fjaa010
  4. Amler H. et al. Defi-ning defi: Challenges & pathway // 2021 3rd Conference on Blockchain Research & Applications for Innovative Networks and Services (BRAINS). IEEE, 2021. P. 181 – 184.
  5. Sch?r F. Decentralized finance: On blockchain-and smart contract-based financial markets // FRB of St. Louis Review. 2021. https://doi.org/10.20955/r.103.153-74
  6. Gramlich V. et al. Decentralized Finance (DeFi): Foundations, Applications, Potentials, and Challenges // Applications, Potentials, and Challenges (July 2022). 2022.
  7. Schueffel P. Defi: Decentralized finance-an introduction and overview // Journal of Innovation Management. 2021. Vol. 9. № 3. P. I – XI. https://doi.org/10.24840/2183-0606_009.003_0001
  8. Werner S.M., Perez D., Gudgeon L., Klages-Mundt A., Harz D., Knottenbelt W.J. SoK: Decentralized finance (defi) // arXiv preprint arXiv: 2101.08778. 2021.
  9. Bartoletti M., Chiang J. H., Lafuente A. L. Towards a theory of decentralized finance // Financial Cryptography and Data Security. FC 2021 International Workshops: CoDecFin, DeFi, VOTING, and WTSC, Virtual Event, March 5, 2021, Revised Selected Papers 25. Springer Berlin Heidelberg, 2021. P. 227 – 232. https://doi.org/10.1007/978-3-030-78142-2_11
  10. Meyer E., Welpe I.M., Sandner P.G. Decentralized finance – A systematic literature review and research directions. ECIS, 2022. https://aisel.aisnet.org/ecis2022_rp/25
  11. Brennecke M. et al. The human factor in blockchain ecosystems: A sociotechnical framework. 2022. https://aisel.aisnet.org/wi2022/finance_and_blockchain/finance_and_blockchain/3/
  12. Matsuo S. Effectiveness of multi-stakeholder discussions for decentralized finance: A conference report of CoDeFi 2020 // Financial Cryptography and Data Security: FC 2020 International Workshops, AsiaUSEC, CoDeFi, VOTING, and WTSC, Kota Kinabalu, Malaysia, February 14, 2020, Revised Selected Papers 24. Springer International Publishing, 2020. P. 221 – 229. https://doi.org/10.1007/978-3-030-54455-3_16
  13. Katona T. Decentralized finance: The possibilities of a blockchain “money lego” system // Financial and Economic Review. 2021. Vol. 20. № 1. P. 74 – 102. https://ideas.repec.org/a/mnb/finrev/v20y2021i1p74-102.html
  14. Borch K. General equilibrium in the economics of uncertainty // Risk and Uncertainty: Proceedings of a Conference held by the International Economic Association. London: Palgrave Macmillan UK, 1968. P. 247 – 264.
  15. Bollmann A., Wang S. International catastrophe pooling for extreme weather // Society of Actuaries. 2019.
  16. Denuit M., Dhaene J. Convex order and comonotonic conditional mean risk sharing // I nsurance: Mathematics and Economics. 2012. Vol. 51. № 2. P. 265 – 270.
  17. Embrechts P., Liu H., Wang R. Quantile-based risk sharing // Operations Research. 2018. Vol. 66. № 4. P. 936 – 949. URL:https://pubsonline.informs.org/doi/10.1287/opre.2017.1716
  18. Qiao C., Sherris M. Managing Systematic Mortality Risk With Group Self?Pooling and Annuitization Schemes //Journal of Risk and Insurance. 2013. Vol. 80. №. 4. P. 949 – 974. URL:https://onlinelibrary.wiley.com/doi/10.1111/j.1539-6975.2012.01483.x
  19. Feng R., Li M. Distributed Insurance: Tokenization of Risk and Reward Allocation //Available at SSRN 4463804. 2023.
  20. Malik A. et al. Introduction to takaful. Springer Singapore, 2019. Vol. 10.
  21. Zanjani G. Pricing and capital allocation in catastrophe insurance //Journal of financial economics. 2002. Т. 65. № 2. P. 283 – 305.URL:https://www.sciencedirect.com/science/article/abs/pii/S0304405X02001411
  22. Chong W.F., Feng R., Jin L. Holistic principle for risk aggregation and capital allocation //Annals of Operations Research. 2023. Vol. 330. № 1. P. 21 – 54.URL:https://link.springer.com/article/10.1007/s10479-021-03987-4
  23. Elliott M., Golub B., Jackson M. O. Financial networks and contagion //American Economic Review. 2014. Vol. 104. № 10. P. 3115 – 3153. URL:https://www.aeaweb.org/articles?id=10.1257/aer.104.10.3115
  24. Charpentier A. et al. Collaborative insurance sustainability and network structure // arXiv preprint arXiv:2107.02764. 2021.
  25. Li Z. et al. A Framework for Digital Asset Risks with Insurance Applications // arXiv preprint arXiv:2408.17227. 2024.
  26. Skipper H. D. Foreign insurers in emerging markets: Issues and concerns. Washington, DC : International Insurance Foundation, 1997. Vol. 1.
  27. Beard R.E. Online Mutual Aid Industry. Ant Group Research Institute, 2020.
  28. Singhal N., Goyal S., Singhal T. Regulatory, Economic, and Political Challenges for Decentralized Insurance: A Global Perspective // Potential, Risks, and Ethical Implications of Decentralized Insurance. Singapore: Springer Nature Singapore, 2024. P. 165 – 210.

Supplementary files

Supplementary Files
Action
1. JATS XML
Download


Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.

Согласие на обработку персональных данных

 

Используя сайт https://journals.rcsi.science, я (далее – «Пользователь» или «Субъект персональных данных») даю согласие на обработку персональных данных на этом сайте (текст Согласия) и на обработку персональных данных с помощью сервиса «Яндекс.Метрика» (текст Согласия).