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Hexxx
Minmatar
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Posted - 2009.07.24 20:30:00 -
[1]
Edited by: Hexxx on 24/07/2009 20:32:03
Disclaimer: I am not asking for ISK, only your opinion. I am aware that there is a distinct lack of numbers in this plan - this is intentional. I hope that the summary gives you an idea of how things would work, I encourage you to try your own numbers against this basic premise. Lastly, I am posting this to address the numerous questions regarding the foundational business plan that I received in my thread asking for developers and the more recent thread I wrote proposing securitization of insurance policies.
EVE Insurance (EI) will function by selling insurance policies to pilots that entitle them to file a claim based on destruction of the ship type covered by that policy. Each insurance policy is a contract between insurer and insured. This contract is defined by the price at which it is sold (or "premium") with the amount to be paid to the buyer (or "claim"). The goal is to generate a profit by selling policies that always result in claims totaling less than the premiums. An additional revenue stream is careful investment of money held by EI. EI will begin by first insuring one kind of ship and then slowly expand to other kinds of ships. Emphasis will be primarily on profitability with growth as a secondary focus.
Governance
Hexxx and Sences will run EI as a private partnership during development and also after the initial launch. The reason for the partnership model is that much of the development will be rapid and EI will need to be very responsive. An agile governance is more appropriate for this initially. Once the business has a reliable profit and is sufficiently stable, the partnership will end and a formal Board of Directors will be taken on and a governance model very similar to EBANK will be adopted. This will strengthen and stabilize EI over the long term.
Insurance in EVE
Insurance in EVE has been challenging for players to do because of several "assumptions" people generally make. I will try to talk around the top three reasons and how EI will be addressing those.
1) Every ship should be insured
This is one of the chief reasons most plans fail. Insurance should be approached from a risk perspective. Which ships have the most inherent risk, which ships have the least inherent risk? For EI, we realized a very important fact; asteroids don't shoot back when you mine them. Non-combat ships have less relative risk than combat ships do and by extension, are the most desirable to insure.
2) Insurance fraud can't be detected
We took the viewpoint that we shouldn't try to detect fraud, we should try to PREVENT it. We prevent fraud by designing policies that simply don't leave fraud viable. We realized this could only be done for T2 ships which leave a wide margin between NPC value and market value. It is possible to insure a T2 ship while not having it pay a replacement cost. Another benefit of T2 ships is that all we need to do is provide "better" insuranceànot copy T1 insurance.
3. Perceived risk versus Actual Risk
In designing policies, we estimated the risk people perceived versus the risk they were actually subject to. If you examine one of the old QEN reports you can see the product/loss ratio for Hulks was amazingly lowà.yet people were convinced Hulks were being destroyed far more frequently. This is important because insurance must be seen as valuable, otherwise people won't buy it. An overly conservative approach to risk by the insurer will result in over priced policies that no one buys. At EI, we think we can price policies people will buy.
EBANK - Advisor | www.eve-bank.net
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Hexxx
Minmatar
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Posted - 2009.07.24 20:31:00 -
[2]
How can EI add value to insurance?
At EI, we have identified quite a few instances where insurance can be voided. Here are some of them:
. Repackage your ship
. Trade your ship to another player
. Put your ship into a corporation hangar
. Sell your ship on the market
. Put your ship inside a contract.
Not only that, but managing insurance is challenging. Also, if you're unable to get to a station to gain insurance, your options are limited. So what can we do about it? At EI, we've come up with some things that we feel add value to insurance in EVE.
1)Policies that are based on pilots, not ships
2)Policies that aren't voided when a ship is repackaged
3)Policies that aren't voided when a ship is sold
4)Policies that aren't voided when a ship is lent out (though the person borrowing should have insurance too)
5)Policies that can be purchased anytime, no matter where your ship is.
These points above combined with better tools to manage and monitor your insurance and your piloting history in one central spot are all additional points of value for the customer.
Conclusion
The bottom line is that EI can provide real options for insuring T2 ships combined with more flexible terms and tools for managing policies across multiple characters. In short; we can do insurance better. In the future, we anticipate that the added value that comes from our additional services and the flexibility of our policies will allow us to even compete in T1 ships at some point.
Beyond the monetary gain of profits through insurance and investment, the value of the data collected by EI will be substantial. Aggregate statistics gathered from our customers could provide greater transparency into actual ship risk and even geographic risk. This will further enable EI to provide the absolute best insurance coverage with the best service, allowing coverage to expand to more ships and enabling policy pricing to provide maximum value to customers.
EVE Insurance. Building a better tomorrow, today.
EBANK - Advisor | www.eve-bank.net
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Mordou
Mordou Manufacturing and Trade
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Posted - 2009.07.24 20:42:00 -
[3]
So if I understand then you will be starting out insuring T2 non-combat ships that are very rarely lost comparable to the number produced, i.e. Hulks. This sounds like an interesting plan, however you are saying you are going to design policies to "prevent" fraud. How are you going to check to make sure that every loss is on the level? It would take me notebook and about 2 minutes to fake a killmail, are you going to handcheck ever one? Ask for screenshots? How will these policies prevent fraud?
You are determining risk of loss based entirely on the ship being insured? Or will you take into account factors such as pilot history, location, etc?
Will you move into possibilities such as the policy is only valid if the loss occurs in hi-sec? Rather then low-sec?
Will you look into something (I know this seems like it would be a long way off) insuring ships on a corp, or even alliance basis?
Will there be only hull value insurance plans available, or could fitting insurance, even for T1 ships become a possibility? Along with even cargo insurance for haulers possibly?
Thats all the questions I can think of off the top of my head, best of luck.
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Yakumo Smith
Gallente
No End To Infinity
Fleetingly Finite
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Posted - 2009.07.24 20:47:00 -
[4]
It will be interesting to see this in action.
From my perspective, i'd be after a rapid turnaround on the isk in the event of being popped, but i'd be receptive to anything better than current in game insurance for T2 ships.
This isn't something i'd ever consider investing in, but I would be receptive to being a customer as long as the hoops I'd need to go through to get the payout aren't too lengthy.
I suppose this must be my sig. I'll do something cool with it eventually. |
Hexxx
Minmatar
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Posted - 2009.07.24 20:48:00 -
[5]
 Originally by: Mordou
So if I understand then you will be starting out insuring T2 non-combat ships that are very rarely lost comparable to the number produced, i.e. Hulks. This sounds like an interesting plan, however you are saying you are going to design policies to "prevent" fraud. How are you going to check to make sure that every loss is on the level? It would take me notebook and about 2 minutes to fake a killmail, are you going to handcheck ever one? Ask for screenshots? How will these policies prevent fraud?
You are determining risk of loss based entirely on the ship being insured? Or will you take into account factors such as pilot history, location, etc?
Will you move into possibilities such as the policy is only valid if the loss occurs in hi-sec? Rather then low-sec?
Will you look into something (I know this seems like it would be a long way off) insuring ships on a corp, or even alliance basis?
Will there be only hull value insurance plans available, or could fitting insurance, even for T1 ships become a possibility? Along with even cargo insurance for haulers possibly?
Thats all the questions I can think of off the top of my head, best of luck.
1) Full API Key will be required. Non-negotiable. Claims will be processed automatically. I understand not everyone will agree to this and that's ok...there is still in-game insurance.
2)As I mentioned in my post...you don't need to copy T1 insurance by doing full value payouts...just payout more than in-game T2 insurance. For example; the most value a pilot could get back would be 80% of the market value of a Hulk. Losing a Hulk will cause a loss...but less of a loss if using insurance. Premiums will be priced accordingly to allow this to remain attractive.
Other things mentioned (pilot history, corp history, etc) are considerations in verbal discussions but not part of the plan for now. Insurance for modules is also not in our plan.
EBANK - Advisor | www.eve-bank.net
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Hexxx
Minmatar
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Posted - 2009.07.24 20:50:00 -
[6]
Originally by: Yakumo Smith
It will be interesting to see this in action.
From my perspective, i'd be after a rapid turnaround on the isk in the event of being popped, but i'd be receptive to anything better than current in game insurance for T2 ships.
This isn't something i'd ever consider investing in, but I would be receptive to being a customer as long as the hoops I'd need to go through to get the payout aren't too lengthy.
We anticipate claims being paid out within 24 to 48 hours at the absolute latest. In most cases payouts will be much quicker (6 hours perhaps), please remember that while processing a claim will be automated....a real human being has to send you the ISK.
EBANK - Advisor | www.eve-bank.net
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Yakumo Smith
Gallente
No End To Infinity
Fleetingly Finite
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Posted - 2009.07.24 20:52:00 -
[7]
ahh, no longer interested.
Full API is going to scare a lot of people off, but I suspected that was what you might require.
But even though i'm not interested, what do you have in place to protect the information you'd gain from customers' full API being misused?
I suppose this must be my sig. I'll do something cool with it eventually. |
Hexxx
Minmatar
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Posted - 2009.07.24 20:55:00 -
[8]
Originally by: Yakumo Smith
ahh, no longer interested.
Full API is going to scare a lot of people off, but I suspected that was what you might require.
But even though i'm not interested, what do you have in place to protect the information you'd gain from customers' full API being misused?
If people can't trust me with full API reads for Kill Logs than obviously this isn't an option for them.
Two things to protect info though (good question):
1) Not storing any data beyond what is absolutely necessary (ship losses)
2) Allowing customers the option to "save" their Full API Key or giving them the option of us never saving it and them having to re-enter it for each claim filed.
We're trying to balance convenience with security. Our data collection will be laid out in exact detail (what we read, what we store) once we launch the service. Generally speaking, if we don't absolutely need information than we have absolutely no business looking at it.
EBANK - Advisor | www.eve-bank.net
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Yakumo Smith
Gallente
No End To Infinity
Fleetingly Finite
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Posted - 2009.07.24 21:05:00 -
[9]
Originally by: Hexxx
Originally by: Yakumo Smith
ahh, no longer interested.
Full API is going to scare a lot of people off, but I suspected that was what you might require.
But even though i'm not interested, what do you have in place to protect the information you'd gain from customers' full API being misused?
Two things to protect info though (good question):
1) Not storing any data beyond what is absolutely necessary (ship losses)
2) Allowing customers the option to "save" their Full API Key or giving them the option of us never saving it and them having to re-enter it for each claim filed.
Being in the IT industry and being paranoid :) :-
What kind of transparency will be allowed so the customers can be sure that both the above points actually happen?
If I was convinced 100% that the above was happening, I'd perhaps considering insuring an alts ship (but certainly never my main no matter what you could ensure in the way of information protection)
Regarding paranoia though, would you consider at some point having trusted others to verify the loss? If you would be willing to have a "go between", you could for example have alliance members funnelling their losses via a trusted alliance director who would then red light/green light claims with yourselves. This might be a way around API key paranoia (they still need to jump through the hoops, but data remains in alliance) and potentially open a huge market of insured ships. (and method of expansion with specific alliance brokers kind of thing)
I suppose this must be my sig. I'll do something cool with it eventually. |
Hexxx
Minmatar
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Posted - 2009.07.24 21:18:00 -
[10]
Originally by: Yakumo Smith
Originally by: Hexxx
Originally by: Yakumo Smith
ahh, no longer interested.
Full API is going to scare a lot of people off, but I suspected that was what you might require.
But even though i'm not interested, what do you have in place to protect the information you'd gain from customers' full API being misused?
Two things to protect info though (good question):
1) Not storing any data beyond what is absolutely necessary (ship losses)
2) Allowing customers the option to "save" their Full API Key or giving them the option of us never saving it and them having to re-enter it for each claim filed.
Being in the IT industry and being paranoid :) :-
What kind of transparency will be allowed so the customers can be sure that both the above points actually happen?
If I was convinced 100% that the above was happening, I'd perhaps considering insuring an alts ship (but certainly never my main no matter what you could ensure in the way of information protection)
Regarding paranoia though, would you consider at some point having trusted others to verify the loss? If you would be willing to have a "go between", you could for example have alliance members funnelling their losses via a trusted alliance director who would then red light/green light claims with yourselves. This might be a way around API key paranoia (they still need to jump through the hoops, but data remains in alliance) and potentially open a huge market of insured ships. (and method of expansion with specific alliance brokers kind of thing)
Full audit of code and database.
We have no plans for brokers.
EBANK - Advisor | www.eve-bank.net
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Vaerah Vahrokha
Minmatar
Dark-Rising
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Posted - 2009.07.24 21:38:00 -
[11]
Remember to add further clauses of void insurance in case the kill happens in known suicide ganker systems. Example, Hulks are actively hunted at Balle (including a sign clearly stating so). Also, ice mining systems are a GREAT suicide ganker playground due to the overly boring and AFKable nature of the job.
If you need information about harassment, merc attacks, resources denial, current social harassment campaigns, station games, suicide ganking and more, I am available for a talk.
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Auditing and consulting
Before asking for investors, please read
http://tinyurl.com/n5ys4h and
http://tinyurl.com/lrg4oz
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Thoraemond
Minmatar
Far Ranger
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Posted - 2009.07.24 22:14:00 -
[12]
Originally by: Yakumo Smith
[W]hat do you have in place to protect the information you'd gain from customers' full API being misused?
It's after-the-fact and so cannot prevent abuse of full API details, but all pilots can at least check for themselves what their API has been used for on the relevant CCP page. Any reported evidence of misuse by EVE Insurance might immediately and irretrievably ruin the viability of the service.
Originally by: Hexxx
We have no plans for brokers.
How about if someone sufficiently trusted (e.g., the much-lauded Chribba) were to offer an API proxy service, so that your insurance business would have access only to the KillLog API data?
This would still require that pilots disclose their full API details, but would greatly limit the information available to EVE Insurance.
á
á
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Selene D'Celeste
Caldari
The D'Celeste Trading Company
ISK Six
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Posted - 2009.07.24 22:34:00 -
[13]
Originally by: Thoraemond
How about if someone sufficiently trusted (e.g., the much-lauded Chribba) were to offer an API proxy service, so that your insurance business would have access only to the KillLog API data?
Just to step in quick, but Chribba is far from the only person in EVE trustworthy to large numbers of people with this information. There is no reason Hexxx cannot do this himself, just as there is no reason EBANK or EOH need Chribba in order to handle the large amounts of information that goes through them, and why there is no reason that other 3rd-party service providers need Chribba. Despite him being first and foremost, he is not the begin all end all of third-party transactions. Given the recent bat of services and others things in the works, I see him having less and less of a monopoly on the area. No offense to Chribba of course, but he can't have it all to himself forever =D
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Vaerah Vahrokha
Minmatar
Dark-Rising
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Posted - 2009.07.24 22:39:00 -
[14]
Quote:
No offense to Chribba of course, but he can't have it all to himself forever =D
I find this somewhat curious, after reading the other thread about bigger dogs > smaller dogs.
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Auditing and consulting
Before asking for investors, please read
http://tinyurl.com/n5ys4h and
http://tinyurl.com/lrg4oz
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SencneS
Rebellion Against Big Irreversible Dinks
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Posted - 2009.07.24 22:57:00 -
[15]
I can answer questions about Hexxx's in game activities since he is part of the same corporation as I am... I can tell you... he has no in game life.
While a full API could harvest information such as transaction trends, what you currently have for sale on the market, where and what price etc. Hexxx doesn't spend any time in game in order to utilize this information if he had it available.
I'd also like to point out, I know zero about programing and do not have any developer or admin access to the back end of EI. So I can't read the API info or collect the data it may yield so there is no threat from me getting to the juicy information.
Amarr for Life |
Mynxee
Minmatar
Hellcats
The Bastards.
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Posted - 2009.07.24 23:03:00 -
[16]
This is a pretty intriguing business idea--even though from a personal perspective I probably couldn't ever take advantage as I doubt low sec pirates could ever get coverage of any kind.  In that same vein, however, I assume that just as with RL insurance companies, customers who make more than a certain number of claims could be re-categorized as high risk and therefore subject to cancellation?
An aside: I've never paid much attention to the MD forum but there is some interesting stuff here.
Bump It! | My Blog: Life in Low Sec |
Thoraemond
Minmatar
Far Ranger
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Posted - 2009.07.24 23:06:00 -
[17]
Originally by: Selene D'Celeste
Despite [Chribba] being first and foremost, he is not the begin all end all [sic] of third-party transactions.
You are right, of course, and that's why I cited Chribba only as an example, rather than suggesting he would be the only person who might be able to offer such a service.
One reason I mentioned Chribba in particular was that he already has a substantial EVE-supporting IT infrastructure in place. Probably relatively few trustworthy people also have the same proven track record of online service-provision.
Before I posted above, I considered suggesting that this project be split into an API-proxy entity and an Insurance entity, but it already has a long time horizon and doesn't need more complexification, lest it become like EBANK's (much anticipated!) Exchange system: 'SoonÖ'.
á
á
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Kazzac Elentria
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Posted - 2009.07.25 00:42:00 -
[18]
Its a great idea.... there is just no meat to chew on here. Its really nothing that you, I and others have covered in previous insurance threads.
The best customers are the ones who don't blow up.
Take the isk from premiums and invest it
Return the return percentage against payouts
The only difference is that you have plans to package these into derivatives in the future. Which makes me ask myself... what roadmap, if successful here, do you have for expanding the insurance of?
Personally I'd go with an idea I posted way back when in the time machine.
POS insurance even up to and including lost revenue from war declarations. |
Skarii TuThess
Maelstrom Crew
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Posted - 2009.07.25 01:02:00 -
[19]
I agree with Kaz - a nice summary of the business side of the plan from what has been mentioned in other threads, but little meat for me to chew on here ;)
I also agree with Kaz that POS / business continuity is the direction I would focus on - but that said I feel there is a market in insuring some ships... I mean players
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Selene D'Celeste
Caldari
The D'Celeste Trading Company
ISK Six
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Posted - 2009.07.25 01:18:00 -
[20]
Edited by: Selene D''Celeste on 25/07/2009 01:22:16
Originally by: Vaerah Vahrokha
Quote:
No offense to Chribba of course, but he can't have it all to himself forever =D
I find this somewhat curious, after reading the other thread about bigger dogs > smaller dogs.
I find it somewhat curious that you continue to misinterpret my OP in that thread =P
Originally by: Thoraemond
Before I posted above, I considered suggesting that this project be split into an API-proxy entity and an Insurance entity, but it already has a long time horizon and doesn't need more complexification, lest it become like EBANK's (much anticipated!) Exchange system: 'SoonÖ'.
The API provision entity would be a very nice thing to have. Hopefully we will see such a thing in the next year? =D
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Nobaudee
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Posted - 2009.07.25 04:33:00 -
[21]
Originally by: Hexxx
How can EI add value to insurance?
4)Policies that aren't voided when a ship is lent out (though the person borrowing should have insurance too)
Possible scam?
Someone I know loses thier ship. I offer to run it thru my insurance policy as them being my alt, or I loaned them my ship. We then split the isk and I still have my original ship.
I insure through an alt account and fly the ship with my main. Negates the full API for killmail verification.
Just wondering.
I like the idea of T2 insurance that actually pays out close to the real value. :)
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SencneS
Rebellion Against Big Irreversible Dinks
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Posted - 2009.07.25 05:00:00 -
[22]
Originally by: Nobaudee
Originally by: Hexxx
How can EI add value to insurance?
4)Policies that aren't voided when a ship is lent out (though the person borrowing should have insurance too)
Possible scam?
Someone I know loses thier ship. I offer to run it thru my insurance policy as them being my alt, or I loaned them my ship. We then split the isk and I still have my original ship.
I insure through an alt account and fly the ship with my main. Negates the full API for killmail verification.
Just wondering.
I like the idea of T2 insurance that actually pays out close to the real value. :)
That is not quiet right and Hexxx didn't expand on this, your insurance isn't void just because a ship is lent out, If the ship dies while it's lent out then we can't verify that unless they have insurance as well.
What would happen is the API picks up the fact they lost a ship in which they had insurance to fly, so they would get the ISK, not you. What Hexxx was saying is, if that ship you lent out died, you are still covered for insurance of one ship of that type.
This opens up a whole new arena which we had touched on but never expanded on. Corp ships, or ships on loan. The Contract "Loan" could become a nice feature in eve with the assistance of our insurance.
Take this scenario.
Corp/alliance say "Hulks are available for use, but if you break it you buy it." You buy one policy for a Hulk even though you don't own one. You can use one of the corp/alliance hulks and at the end of the day you return it. Across the space of three months you use 20 different hulks, without the threat of ever needing to pay back the entire cost because you're insured for just one hulk death.
We don't care which hulk dies, its the fact that you, while piloting a hulk, lost it. So here is you claim. Under the current in-game insurance you'd need to insure 20 different times and you'd end up paying close to 175mil and only get about 30mil back.
Amarr for Life |
Mr Horizontal
Gallente
KIA Corp
KIA Alliance
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Posted - 2009.07.25 14:55:00 -
[23]
Just do it. Make it work and we'll get the CSM to present the model to CCP to finally get rid of this ridiculous and unnecessary ISK tap that is ingame insurance.
Director | www.eve-bank.net |
Selene D'Celeste
Caldari
The D'Celeste Trading Company
ISK Six
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Posted - 2009.07.25 16:28:00 -
[24]
Originally by: Mr Horizontal
Just do it. Make it work and we'll get the CSM to present the model to CCP to finally get rid of this ridiculous and unnecessary ISK tap that is ingame insurance.
=D
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Varo Jan
Minmatar
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Posted - 2009.07.25 16:50:00 -
[25]
Originally by: Mr Horizontal
Just do it. Make it work and we'll get the CSM to present the model to CCP to finally get rid of this ridiculous and unnecessary ISK tap that is ingame insurance.
The "ridiculous" in-game insurance
- will not scam you.
- is 100% dependable.
- does not rely on players who may or may not be around at a later date.
- does not rely on an out-of-game tech setup that is unproven/not yet developed and may, like DBank, fall apart.
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Claire Voyant
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Posted - 2009.07.25 17:34:00 -
[26]
Originally by: Mr Horizontal
Just do it. Make it work and we'll get the CSM to present the model to CCP to finally get rid of this ridiculous and unnecessary ISK tap that is ingame insurance.
Be careful of what you wish for. There are other isk taps in the game, such as bounties and missions and shifting to other isk taps might have unintended consequences.
At least tech 1 insurance consumes minerals in return for isk. Bounties and missions generate loot and salvage in addition to isk. It might wreck a lot of the whole production and trading part of the game. Then we will all have to go back to mission running for isk.
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Dethmourne Silvermane
Gallente
Ceptacemia
Systematic-Chaos
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Posted - 2009.07.25 17:41:00 -
[27]
As I've said in prior threads, I'm greatly intrigued. Given your initial focus on the Hulks, I'd like to get in on such a development as soon as possible - I know you're not looking for investment right now, but please let me know as soon as it might be considered!
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CynoGirl One
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Posted - 2009.07.25 17:52:00 -
[28]
For the people concerned about the API... You can go to http://www.eveonline.com/api/log.asp and see who has accessed what parts of your API. SO while yes he could grab your transactions and what not you would know and therefore stop using his service and let everyone know.
I think this is a good idea though I guess the question will be how much for x ship in if it's worth it or not. Also the risk to your venture is potentially high if for example you insure a large group of hulks for all the players of a corp and they all get suicided at the same time.
Good luck with your venture.... I might even invest
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Kalrand
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Posted - 2009.07.26 00:04:00 -
[29]
Will you be insuring only the hulls? or the fittings as well?
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Hexxx
Minmatar
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Posted - 2009.07.26 01:13:00 -
[30]
Originally by: Kalrand
Will you be insuring only the hulls? or the fittings as well?
Just hulls at first. Problem with fittings is I would only allow claims on fittings destroyed via killmail. That means a fitting lost (but not showing up on killmail) would never be reimbursed.
I will never allow manual claims. It's API or nothing.
EBANK - Advisor | www.eve-bank.net
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