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Lallante
May 11 2011, 12:16:54 PM
I've been thinking for a while now about setting up a capsuleer run insurance corporation. The prime purpose of the corporation would be to provide insurance cover for hulls not currently adequately compensated (t2, t3, supercaps) and module and implant insurance.

I'm going to theory-storm some ideas here, and I'd appreciate your help in telling me why it wont work, why it would be too much effort, or why people would never buy insurance through it.

The Capsuleer Insurance Corporation ("CIC")

Policies

General
All policies would be for a recurring term of 1 calandar month beginning and ending at downtime on the 1st of the month (a "month"), for ease of administration.

All premiums would be paid in advance prior to downtime on 1st of each month.

Cover could be prepaid for up to 3 months.

Failure to pay a premium on time woulds suspend insurance cover until 3 hours after the premium was received. Cover would still expire at downtime on the 1st of the next month. For example if I failed to pay this weeks cover before the downtime of the 1st, and instead paid it at 09.00 on the 3rd, cover would begin at 12.00 on the third and end at downtime the 1st of the next month. Failure to pay a premium within a month of it becoming due would void the policy (you would need to arrange a new policy to resume cover).

Policies
Policies would have three components: ship class(es), fittings value maximum and type(s) of loss covered.

Ship Class
The most basic type of policy would be for a specific hull (eg dramial) on a specific pilot. Insurance would attach to any such hull the insured flew.

Additional hulltypes, and pilots (alts etc), could be added to a single policy, at a discounted rate.

"Pod" would count as a shipclass.

Fittings max value
Fairly self-explanatory. At the lower ends (sub 2bn or so) there would be brackets - up to 100m, up to 150m etc..

For high value ships/setups, individual rates could be negotiated.

ONLY destroyed fittings would be covered (too much opportunity for fraud otherwise).

Implants would count as a fitting for policies covering pod insurance.

Types of Loss
Options would include:
- General cover against and and all loss
- Loss to Pirate/Mission NPCs
- Loss to Players while NPCing
- PvP (highsec)
- PvP (lowsec)
- PvP (0.0)
- Fleet Fights only
- (Accidental) Loss to Concord
- Loss to suicide gankers, canflippers etc

Of course, multiple could be selected for a discount. In addition selection "all purpose insurance" would be the most discounted (but most expensive) option.

Claim

A claim would need to be API verified (through CIC's own interface, not an API-verified killboard).

CIC would reserve the right to request additional proof as to type of loss.


Payout

The base payout of insurance would be:

+ a replacement ship or current Jita price equivilent,

+ plus replacement modules (if available on market in Jita) or cash equivilent (value to be reasonably determined from market/contract history, in CIC's sole discretion),

+ plus the cost of platinum insurance for that hull (whether you intend to / have insured it or not)

- less the excess charge

- less the payout value of platinum NPC insurance for the hull (whether you have such insurance or not)

CIC would reserve the right to provide a partial or full cash alternative at its sole discretion, and would always do so where the payout value as calculated above is less than the ship + module replacement value.

Multiple Claims
A claim would not terminate your insurance contract, however all claims in a given month would be subject to a cumulative cap of the "fittings max value".

CIC would reserve the right to terminate the insurance cover for all subsequent months, or to renegotiate the premiums (generally an expensive loss would lead to higher premiums the following month(s)).


Premiums

This is the important part, that would determine the success of the whole business model.

Obviously, the three policy factors above would determine the base premium. The exact formula would need extensive datamining to work out, but would be automated.

The base premium would then be adjusted by a pilot-specific factor, which would be based on the pilots k/d ratios, loss history etc (API verified). This would require some human assessment.

Finally, the pilots claims history with the CIC would come into play.

No Claims Bonus

Yes, an incentive to not claim under your policy - a slowly ramping lump sum, for a given 3 month period with no claims.

Excess

Another incentive not to claim. Likely to be in brackets depending on size of premium, and scaling.

Loss Adjustment

To the extent possible, almost all of the above would be automated through an api-verified interface.

CIC would pay independent contractors ("Loss Adjusters") to sift through the claims and pay them a percentage of the value of claims they identify as void (for example due to wrong cover type, evidence of fraud, etc).

Conclusion

Once set up, the whole operation would, for the most part, run itself.

The key difficulty would be doing enough market research to get the initial premiums close-to correct to allow CIC to break even or make a profit.

There is obviously still the question of whether people would be willing to pay what are likely to be fairly hefty premiums.


Goal

The stated goal of the project would be to demonstrate to CCP that player run insurance is not only possible, its awesome, and that therefore NPC insurance, horrible isk faucet that it is, should be removed from the game.

Snake
May 11 2011, 12:22:52 PM
You have to remember that eve is not IRL where people take care of their shit and try not to get it blown up. I'd go as far as to say 99% of the ships you insure will die in the first month, leaving you broke.

Lallante
May 11 2011, 12:25:37 PM
You have to remember that eve is not IRL where people take care of their shit and try not to get it blown up. I'd go as far as to say 99% of the ships you insure will die in the first month, leaving you broke.

Its possible, but not as likely as you'd think.

Remember that pilot loss history etc would be taken into account.

Remember also that this is primarily for expensive ships and you dont get the value of dropped modules back People dont suicide expensive ships just because they will get 50 - 60% of the value back...

This would be for people flying 5bn isk sleipnirs, 30bn Moms, 8bn t3s or faction BSs etc. These aren't ships that people lose most fights.

If someone wants 0.0 PvP insurance on his t2 fit hellcat, the premium would reflect that (think 50% of the payout value).

Rakshasa The Cat
May 11 2011, 12:29:45 PM
The people who don't expect to lose their ship won't be getting an insurance, only those who think they will.

Maximillian
May 11 2011, 12:34:02 PM
I assume the scheme works as follows...

1. Collect premiums,
2. Make a few well publicised payouts to friends, alts,
3. Collect the rush of premiums as EvE has way to much isk,
4. Ships blow out,
5. Insurance claims are met with laughter.

Sound right? Because a player run insurance scheme in EvE will be a scam from either the insurer or the insured.

Lallante
May 11 2011, 12:35:02 PM
The people who don't expect to lose their ship won't be getting an insurance, only those who think they will.

I always get insurance on my fleet BS because I expect to lose it, but about half the time it expires unused because I dont in fact do so.

If you are dual boxing in a multi-bn setup, hunting ratters or plundering wormholes for example, you dont EXPECT to die, but you know that a neuting bait-trap could hit you at any point.

Likewise if you fly your mom in PvP you dont expect to die, but sooner or later (maybe once in a year) you will be hotdropped and stand a good chance of losing it.

Lallante
May 11 2011, 12:35:48 PM
I assume the scheme works as follows...

1. Collect premiums,
2. Make a few well publicised payouts to friends, alts,
3. Collect the rush of premiums as EvE has way to much isk,
4. Ships blow out,
5. Insurance claims are met with laughter.

Sound right? Because a player run insurance scheme in EvE will be a scam from either the insurer or the insured.

If you get the balance of premiums to losses about right, then it would be neither.

Re Scamming:

This is definitely a topic for another thread, but I'm pretty confident (as a lawyer) I could set up an account in the name of a corporation IRL, and have the directors of that corporation all sign contracts limiting what they could do with the ingame assets of that account (and expressly setting out liquidated damages with an ISK -> $ coversion rate, so the courts would not need to assess whether imaginary ISK owned by CCP has RL value to the account 'holding it'.)

This wouldnt be relying on any nascent law regarding damages for virtual goods (which I agree is pretty tenuous), but instead would sidestep it entirely by imposing contractual limits on the actions of the directors using the account and specifying liquidated damages.

A simple script would change the password of the account each and every login - no two directors would share a password, they would each login with their own details to an external website, which would then change the pw of the account and provide the new one to them. On logout, the system would again change the pw to a many-digit holding one until the next login. This would let you be 100% sure which director did which action (IP address etc wouldnt be necessary).

This wouldn't even neccesarily breach the EULA as corporations are legally persons, and as such there would be no acct sharing going on.

Al Simmons
May 11 2011, 12:36:21 PM
I too, enjoy scams.

FatFreddy
May 11 2011, 12:37:09 PM
:effort:

Snake
May 11 2011, 01:09:01 PM
lol that is really :effort:

Dodgy Past
May 11 2011, 01:51:00 PM
I can see the value in this but here's the rub, I would use this service so I could take larger risks with some of the ships I fly.

Also for some ships that people lose a lot of, such as drams you might want to shorten the period.

Djakku
May 11 2011, 01:52:50 PM
I've never imagined anything like this to work in EVE mostly because of the complete lack of trust between players.

Rudolf Miller
May 11 2011, 03:16:11 PM
I've never imagined anything like this to work in EVE mostly because of the complete lack of trust between players.

<3 scam :companioncube:

Raz
May 11 2011, 03:41:35 PM
I've never imagined anything like this to work in EVE mostly because of the complete lack of trust between players.

Not empty quoting.

Helen
May 11 2011, 04:22:10 PM
And yet even if it had the name Scam Insurance Company players would place isk into it.

ry ry
May 11 2011, 04:35:49 PM
Assuming this isn't a blatant scam for a second, it's actually a pretty good idea.

Tie it into a (enormously complex and expensive) webapp so ppl can insure online and you stand to make lots of isk, providing you can convince players its legit.

Either way, it sounds like an awful lot of effort.

noobcake
May 11 2011, 04:35:58 PM
I assume the scheme works as follows...

1. Collect premiums,
2. Make a few well publicised payouts to friends, alts,
3. Collect the rush of premiums as EvE has way to much isk,
4. Ships blow out,
5. Insurance claims are met with laughter.

Sound right? Because a player run insurance scheme in EvE will be a scam from either the insurer or the insured.


this...

calling scam on either, or BOTH ends of this...

Lallante
May 11 2011, 04:54:39 PM
I've explained in detail how I could ensure it wasn't a scam.

As a lawyer, the risk of RL proceedings against me (aka, lose my solicitors licence), would be a pretty compelling.

I'd probably have to put pretty huge carveouts for losses due to general insolvency, business failure etc that wasn't due to director embezzlement or gross incompetance

Mike deVoid
May 11 2011, 05:05:10 PM
Personally, I don't think that you should bring RL stuff into the mix. It wouldn't be necessary if you built up trust first, there will still be people who wouldn't trust you to use it and I suspect there would be complications should you (or other directors) no longer wish to play the game/lose internet access for no good reason/etc

Why don't you run it for your own corp or alliance first to demonstrate proof-of-concept and build up trust with others' isk?

noobcake
May 11 2011, 05:10:24 PM
I've explained in detail how I could ensure it wasn't a scam.

As a lawyer, the risk of RL proceedings against me (aka, lose my solicitors licence), would be a pretty compelling.

I'd probably have to put pretty huge carveouts for losses due to general insolvency, business failure etc that wasn't due to director embezzlement or gross incompetance

because when you scam in a game, people can bring about charges in RL? some lawyer you are...actually, this whole thread, including this post, is nothing more than a gigantic troll. Well done.

Leboe
May 11 2011, 05:17:27 PM
don't scam brosefs on FHC thats not cool

Herschel Yamamoto
May 11 2011, 05:47:48 PM
You're going to get the everloving fuck scammed out of you.

DerWish
May 11 2011, 07:29:52 PM
Lal either you will scam your investors or they will scam you.
Best thing I have learned from EVE only trust seriousbiz pixel spaceship players with pixel money if you know where they live IRL.

joe space
May 11 2011, 07:36:41 PM
tl;dr

you will get scammed or you will scam. it working in a situation where no one is getting scammed = highly unlikely.

KKassandra
May 11 2011, 07:43:28 PM
Apart from anything else, you're offering to insure modules? Meaning you're going to maintain up-to-the minute market monitoring so you can determine the correct market price (at the time of destruction) to pay out for every single module in Eve? Have fun.

Also, paying out for losses to NPCs? So there will be exactly zero real people on the killmail other than the claimant?


Edit: just saw you will require API verification. So you're going to require a Full API from all your customers? Yeah, okay.

Lallante
May 11 2011, 08:35:08 PM
I dont really get how I could be scammed (much). If a claim looks dodgy or is clearly a scam, I just don't pay out on it until some independent third party eg Chribba (at the cost of the claimant) reviews it for legitimacy.

You might be able to get small scale scams, but remember its a huge risk to try to scam - if I dont pay, you've lost any modules that don't drop plus the value of the ship.

Plus API verification and no payout on dropped modules really limits what you can do.

Lallante
May 11 2011, 08:41:02 PM
Apart from anything else, you're offering to insure modules? Meaning you're going to maintain up-to-the minute market monitoring so you can determine the correct market price (at the time of destruction) to pay out for every single module in Eve? Have fun.

Also, paying out for losses to NPCs? So there will be exactly zero real people on the killmail other than the claimant?


Edit: just saw you will require API verification. So you're going to require a Full API from all your customers? Yeah, okay.

Why full API? Only need limited to pull killmails.

noobcake
May 11 2011, 08:42:44 PM
assuming this elaborate troll is actually serious....

How on the green fucking earth are you going to determine if a loss is "dodgy"? How would Chribba "review" it? Look at the killmail and say "OH HAY YEH LOOKS DODGY"...theres no idiot proof way to do that.

Also, along the lines of what KKaassandra wrote, fuck you if you think youre going to get FULL apis from all clients...

KKassandra
May 11 2011, 08:45:05 PM
Apart from anything else, you're offering to insure modules? Meaning you're going to maintain up-to-the minute market monitoring so you can determine the correct market price (at the time of destruction) to pay out for every single module in Eve? Have fun.

Also, paying out for losses to NPCs? So there will be exactly zero real people on the killmail other than the claimant?


Edit: just saw you will require API verification. So you're going to require a Full API from all your customers? Yeah, okay.

Why full API? Only need limited to pull killmails.

Really? All the docs I can find say otherwise, but I may well be wrong.

http://wiki.eve-id.net/APIv2_Page_Index

noobcake
May 11 2011, 08:53:59 PM
yeh, KK...it's just a troll, and we're all feeding into it. Best to ignore the thread ;)

Nague
May 11 2011, 11:33:55 PM
Payout

+ a replacement ship or current Jita price equivilent,

+ plus replacement modules (if available on market in Jita) or cash equivilent (value to be reasonably determined from market/contract history, in CIC's sole discretion),



:obama:

Don Pellegrino
May 11 2011, 11:43:08 PM
As a lawyer, the risk of RL proceedings against me (aka, lose my solicitors licence), would be a pretty compelling.
That line ruined it :P

Very well done apart from that, though! I'm guessing you were very bored at work, am I right?

Lana Torrin
May 12 2011, 12:23:41 AM
As a lawyer, the risk of RL proceedings against me (aka, lose my solicitors licence), would be a pretty compelling.
That line ruined it :P

Very well done apart from that, though! I'm guessing you were very bored at work, am I right?

Yeah, talking about RL Lawyer stuff in a computer game when scamming is not only accepted but encouraged kinda blew it form me too.

Space Panda
May 12 2011, 12:27:50 AM
Sounds like a good plan. Let us know how much you pull out of it before your clients get wise to it.

Dierdra Vaal
May 12 2011, 12:15:17 PM
While I love player initiatives like this (not just as scams but also in the crazy optimistic hope that one day one of them will not be a scam and actually make EVE a more interesting place), I am not convinced you can make this attractive to users (so being insured is better than not being insured) while still being profitable for you.

Users get paid out a new ship according to your description. And I assume they do not pay the full price as a premium. So how will you remain financially solvent if you spend more money than you make?

People can often get ships below market price through friendly producers/corporate ship replacement programs. This means they actually spend LESS than the amount they get back from your insurance, which then opens a door for all sorts of abuse.

Basically I'm missing a simple insurance contract lifecycle description and contract restrictions, rules and mathematics that prove systemic security and prove the service can remain financially solvent. Right now it seems you're relying an awfully lot on people being honest and not doing their best to cheat the system, which is a bad call in EVE.

Phatstabley
May 12 2011, 04:03:03 PM
I must have gone to the wrong law school.