Illustration: Dondy Razon
As is the case in many sectors, businesses find their roots in local communities where the needs are addressed by local solutions. This used to be the case with financial services, such as banking (Desjardins Bank in Québec was born to help the French rural community of New England access credit offers), but it was also true for insurance services. First providing protection to the community of overseas merchants, every group started creating their own closed circuit insurance system based on their specific needs and risks. Such was the case for The California State Firefighters’ Association in the U.S. or the MAIF in France, designed to provide teachers with car insurance packages. Being part of a community was a key factor in feeling protected, as the community supported its members through good and bad.
With globalization, companies have grown national, even worldwide. But, some have lost touch with the local community where they laid their roots.
Today, digital – and especially thanks to the social spheres and virtual communities it recreates – could help bring back the mutual structure of insurance and foster the community and local protection feeling that was first at the root of such a system.
Some companies have already paved the way for this type of initiative, such as friendsurance that pulls in friends from the user’s Facebook account to provide help to cover a fellow member’s claim. It’s a great way to recreate community and a sense of protection for insurers, but also to minimize the risk of fraud associated with services offered by unknown brokers from multinational insurance companies. A win-win offer for sure, but will insurers be fast enough to change their business models before consumers take the lead and create their own system?