* Insurance happens only after the investment has already taken place. If it's a scam the investor (who was told he could insure his investment) is already out of money at this point, the scammer won't provide you with the required information and you have successfully dodged the bullet. If it's not a scam you earn fees and dividends on the deposit.

(The only insurance I would really consider as an investor would be an investment fund type of thing as cosmo did or pretended to run it - the insurance guy buys out an unsecured offering that is in his opinion profitable and resells it as "secure" bonds [secured by his reputation and/or by collateral he provided to a 3rd party] at a lower interest rate.
In that case the risks, costs and responsibilities are clearly assigned and the insurance guy can't avoid havinga working risk model that tells him which offerings have high interest rates relative to their risks and which ones don't.

You come across as trying to conjure a solution to a problem that you don't have a solution for - or at least not a solution that you yourself actually have faith in - out of thin air. That doesn't work.)

[
Are you thinking of the MD audit fund?

That was certainly a related idea and I feel a much better one. RAW23, myself and some others set it up in order to pay auditors to audit small MD offerings.

pretty much.

I guess opening a 3rd party service became too obvious and screams scam nowadays, so might aswell call it "player run insurance"

(Just my 2 Cents about the service, not saying its your intention to scam)

You should make the insurance thing with a variable payout in case of scam, you calculate the variable part with a formula taking into account the risk of the bond, the name of the investor translated in binary language and the price of Sansha Electrum tag.

Ask JVL to write something for you, it will look cool and confusing at the same time. You will make a lot of isk !

- Low risk: (collateral loans held by another person)
ArrowPremium(Deposit): 5% of your investment, minimum 100m
ArrowPayout in case of scam: Premium(Deposit) +100% of your investment (including your deposit), minus fees
ArrowPayout in case of Non scam: Premium(Deposit) Minus fee.

cool so this is going to make a good way for investors to scam right?



right so lets see I invest in a bond which has collateral and take out insurance on that bond. so then the person scams. so collateral gets sold by 3rd party and I get my money back then you give me all my money back again because i've bought your insurance so i've doubled by money nice :D

If I give you a lot of ISK will you be able to invest it successfully into unsecured offerings?.

You are spending a lot of time working on a framework that relies on a centerpiece which (to my knowledge) you simply don't have.

You are right, by holding a "loldeposit " i'm essentially carrying out something a 3rd party typically would do.

in the OP, it would be investees contacting me, to purchase a lolpolicy. not me buying out Debts.

Interesting idea Candy. I don't care if you are making money in the process as long as my interests are covered.
All I want to know is, do you cover larger investments ? (10b-20b ) and what are the fees you are talking about in the OP ?

Please excuse me if this information is provided, but I'm at work and I don't have time to read everything thoroughly .

Thank you.

It's the same.

Imagine you would sell insurance for 100% of the investment amount. The only times anybody would purchase such an insurance policy would be if the effective interest rate of the (now insured) offering (after taking insurance fees into account) would be equal or higher than the common interest rate of a fully collateralized offering.

Assuming that your insurance business is viable this means that your risk model has to be more accurate than the risk model used by the market (which determined the interest rate of the unsecured offering) - otherwise there would be no room for arbitrage and thus no room for you to sell insurance policies at an attractive price.

The same reasoning also applies for partial insurance policies.

It's the same.

Imagine you would sell insurance for 100% of the investment amount. The only times anybody would purchase such an insurance policy would be if the effective interest rate of the (now insured) offering (after taking insurance fees into account) would be equal or higher than the common interest rate of a fully collateralized offering.

Assuming that your insurance business is viable this means that your risk model has to be more accurate than the risk model used by the market (which determined the interest rate of the unsecured offering) - otherwise there would be no room for arbitrage and thus no room for you to sell insurance policies at an attractive price.

The same reasoning also applies for partial insurance policies.

But coming up with a better model that is not only able to stand the test of the past (running it against past investment opportunities to see if it would have resulted in profitable investments) but can also cope with people reacting to the model being used in practice (they'd try to make their scams resemble offerings that your model rates highly) is hard.

I think one of your challenges may be the spread though. Now adays allot of these bonds offer a really low percent such as 2 % (i.e. grendel)

I think one of your challenges may be the spread though. Now adays allot of these bonds offer a really low percent such as 2 % (i.e. grendel) and if you're taking 1% say, than the effective profit is cut in half. Could you give us perhaps a full example of a current bond that you would rate and how it would work so that everyone can fully realize your insurance model?

Thanks,
Ark

Why exactly would you pay someone like Candy to insure your investment with Grendell (or someone similar)?

If someone is trustworthy enough for you to accept a 2% ROI on an investment with them then Candy will just lower the safety of your investment, not increase it.

The market for Candy's idea is unsecured offerings in the 6-10% range and there are plenty of those.

- High risk: (No collateral loans)
ArrowPremium(Deposit): 25% of your investment, minimum 500m
ArrowPayout in case of scam: Premium(Deposit) +10% of your investment (including your deposit), minus fees
ArrowPayout in case of Non scam: Premium(Deposit) Minus fee.

why exactly would anybody take up this anyway?



so say you invest 2 bil in a non collateralised loan of which as you say there are plently, you take out the insurance 500 mil in there. he's going to charge 50 mil in fee to make it worth while so on a 2 bill loan you looking to get 150 mil back . so on a 10% loan your not even securing the interest payment.....

Candy did clearly state that the numbers were all placeholder figures. Using them for any analysis seemed entirely redundant to me. If the idea ever received even a breath of life I would expect the numbers to change dramatically and be at least viable in a shallow sense.

My concern, is not that nobody would use the proposed service but that somebody might use it. As an unused service it would do little harm and as a cautionary example to others it may even do some good. If anyone was to actually make use of it, even if the pre-req for doing so was utter retardation, then it would be a very bad thing.