What Would Google Do_ - Jeff Jarvis [109]
Google Mutual Insurance: The business of cooperation
As I was researching this book, I wrote on my blog that I had come up against a few industries I thought were immune from reform through Googlification. Insurance topped my list (we’ll get to the others shortly).
Insurance is built on getting us to take a sucker bet—a bet even we want to lose. Nobody wants a reason to collect collision, fire, flood, health, or certainly life insurance. Worse than Vegas, we know that insurance companies stack the deck against us; that is the foundation of their business. If we don’t collect, we are losers (we’ve lost our money). If we do collect, we’re still losers (something bad happened). If the insurance company pays out too much and goes out of business, then those of us who paid in still lose. We can’t win. The industry has to suspect that we are liars, making us prove our misfortune and reluctantly giving us back the money we put in the pool. They make the economics overcomplicated so we don’t know just what suckers we are and so we keep making safe bets—safe for the insurance company. Our relationship with insurance is, therefore, necessarily adversarial and built on mutual mistrust. How incurably unGoogley.
My readers disagreed. A few dozen of them left comments on my blog arguing that insurance can reform, and they showed me how. Here are excerpts from the conversation and my education. (Let this chapter be an object lesson in the power of open, collaborative thinking.)
The first comment came from Seth Godin, author of Purple Cow, Small Is the New Big, Tribes, and other business best sellers, who scolded me: “Think bigger, Jeff!” He provided a few examples of social insurance. First:
20 Korean families pool finances and open businesses one at a time…each member of the group has a huge incentive to help each business succeed, so they can get the money when it’s their turn. Imagine insurance being created in a coordinated fashion, with each member of the coop working to decrease the risk of everyone in the pool.
A commenter from France, Bertil Hatt, said the Mutuelle Assurance Instituteur France (MAIF) lives by some of these principles of mutual benefit, providing insurance as well as services, such as home and child care. Premiums are higher than average, she said, but lower for the young, the poor, and students. “How can they make it?” she asked. “Thanks to an implicit contract: When you get richer, you stay with them not only for the service, but because you believe in their way.” Insurance becomes a collective, though private, good.
Godin next talked about smart devices that might need less insurance. Cars with better brakes can cost less to insure if they keep us safer and also cost less to repair and to warranty—which, again, is a form of insurance. Godin took the idea a step farther and suggested that “smart products come with their own insurance because they’re so much better and talk to each other.”
When cars know where they are and where trouble might be, or when they integrate with each other and their drivers and the roads and the police, shouldn’t insurance get better?
Right. The network becomes a form of insurance as connected devices can be monitored, repaired, and improved and can learn to do their jobs better and more safely. In the comments, Chris Cranley took off on Godin’s idea and suggested that just as smarter products may need less insurance, the same may be said of smarter people: “If I knew how to avoid problem X, I would not insure against it.” Education and information become insurance against insurance. Godin took this line of thinking to its extreme when he speculated about opportunities not just for smarter people but—genetically speaking—healthier people as determined by 23andMe, a service that analyzes users’ DNA. (Founded by Brin’s wife, Anne Wojcicki, 23andMe discovered his Parkinson’s gene. Google invested in the company.) Godin said:
And while some may not like it, what happens when