|
Author |
Thread Statistics | Show CCP posts - 0 post(s) |
Finideach
Pan Galactic Gargle Blasters Delta.Green
|
Posted - 2008.04.08 03:58:00 -
[1]
Pulled from the excellent discussion going on in another thread. I've been noddling the basics of putting together a player run insurance system (see other thread for some of the rough details) and there's some great ideas going on.
I want to prototype/test this method in the next month or so on a very limited nature mainly so that I can A) see how it works in a real environment with small exposure and B) fund any covered losses out of pocket.
But as I work towards setting this up what information would the board be looking for in terms of transparency to make the prototype valid for the lessons learned beyond myself and participants? So far I've thought of:
Transparency of Policy & Terms - Listed on this board so everyone can see them and ensure they are applied as documented
Visibility of Transactions - Post on this forum the key details of the business plan, test plan, test results and operational details of prototype (i.e.claim is made, payout terms, as well as assumption/cancellation of policies)
3rd Party Fund Holders - Who holds the amount reserved to cover losses? EBank or Fury or others?
3rd Party Auditors - Who keeps track of the books? Same as above?
Who participates? Criteria of what players/pilots to participate in the test?
Who funds? Where I get the funds (if any are provided beyond my own pocket)?
Alts involved? (If I make an alt to do this?)
Backup operator (in case I'm unable to continue the affair due to R/L issues who steps in to at least liquidate and repay everyone?)
What else would the board want to see included in the prototype?
BTW I'm going with the working name of EFlak! (like the duck)
|
Finideach
Pan Galactic Gargle Blasters Delta.Green
|
Posted - 2008.04.08 22:34:00 -
[2]
That was my plan. Go through one or more prototypes to see how it works. I'm approaching this more from a "solve the problem" approach rather than "try and get a ton of funding." If successful I think the concepts could be used by a variety of business models - if the fail is epic that's why I want to keep it small so I can pay out of pocket. I'm selling out my inventory of trades to get up to around 500m where I can begin the first small prototype.
Two questions to EBank:
1. Can you hold the reserve of funds I am willing to put forward to guarantee coverage payouts? (So the prototype customers know that there is money to pay if they have a loss).
2. Does EBank offer "estate planning". I've been reading a lot on the forums and it seems one persistent problem is "what happens when a player disappears". Can EBank recieve instructions to act upon should I not post on the forums in say, ~30 days, i.e. disburse the funds to the right people, make sure they get paid back etc.
I'm not thinking of disappearing, but that seems to be a worry point for many folks and wasn't sure whether EBank can execute a kind of estate management service like that.
|
Finideach
Pan Galactic Gargle Blasters Delta.Green
|
Posted - 2008.04.09 03:45:00 -
[3]
We're thinking on the same lines - and that's how I've framed the policy terms and conditions. The insurance program I'm proposing to prototype aims to make "partially whole" from a "larger loss" - rather than just payout isk. However my corp has asked me to run this by them first so I'm going to leave it at this for now. =)
|
Finideach
|
Posted - 2008.04.10 03:21:00 -
[4]
Good question Social Trader. "How do you keep someone from cashing in twice?"
One policy term that will probably be in any variety of EFlac! insurance is a variation of the following:
** Policies are automatically suspended upon sending of a kill mail claim and will remain suspended until notified by EFlac! that policy is reinstated.
In other words if you destroy ship 1 - and after the vetting of the claim receive a payout or replacement, but haven't received a notification of reinstatement of policy and destroy ship 2 - you have no rights to claim coverage on that second ship.
This allows the insurer to do a little investigating both before and after the claim payout. If they decide that the risk simply isn't worth it (either fourth time this month they've made a claim payout or something smells very fishy but they can't quite prove it) they can notify the player that they're not going to continue coverage.
That being said I do think that any insurer, to maintain credibility, should pay out the coverage unless there is obvious provable fraud or violation of policies that first time. This policy term would prevent someone from 'stacking' up multiple claims in a short period of time with the insurer at least consenting to the risk.
|
Finideach
|
Posted - 2008.04.10 03:25:00 -
[5]
Ah Social Trader. Read your question again on the longer post and see that you are asking "How do you profit off of insuring ships already insured by Eve?"
I agree with the previous poster. I don't think you should be insuring ships insured by Eve CCP nor do I think you should try.
The type of insurance I am looking for at EFlac! are the types of things Eve *doesn't* insure:
Fittings Cargo Implants POS Loss Business Loss because of Patch Day Delays or Patch Errors WarDec coverage etc.
Obviously as you go down the list it gets more complicated and extravagant and way out of my league for now. =)
There's a ton of activity out there that *could* be insured without touching what Eve CCP currently insures, which is just a partial payment on the ship destroyed.
BTW I have just finished the first online survey to collect some demographic data from folks that would help give some insight into the mechanics of insurance. I'm still working the bugs out but when I get it done I'll post it up in this forum and then post the results as well.
|
Finideach
|
Posted - 2008.04.10 04:46:00 -
[6]
Separate programs definitely makes sense. As does the use of risk ratings to qualify different pilots that are applied to either captives or premiums.
What about API's? What can be confirmed via a basic or an advanced API?
Implants are extremely tricky because of Jump Clones so might not be a good bet.
|
Finideach
|
Posted - 2008.04.10 05:24:00 -
[7]
Eve Mon uses API to identify implants doesn't it? Could the same be done for other purposes? Or does Eve Mon only grab attributes and requires you to put in implants? (Can't quite tell looking at it).
|
Finideach
|
Posted - 2008.04.14 14:19:00 -
[8]
Quote: Insurance of rigs could lead to people insuring them, only to lose them on purpose to get their money back.
Which is why right now I'm leaning to "replacement" policies rather than "repayment" policies - if you lose fittings - you get your fittings back minus the deductible. There are still scams in that method, but the key one - getting a ton of ISK - is taken away. After all is said and done you have exactly what you started with before your ship was destroyed so your net gain is less. Combine that with using the Jita averages to determine the market value of the replacements, and the coverage cap determining how much is replaced - and if the insurer can get the replacements on discounts from the average, it creates a slightly better scenario.
For example:
Player A has 10m of coverage for their fittings & rigs. They lose their ship and the kill mail mechanism alerts EFlac!. The Jita average value of all their fittings is 8m, take away a 1m deductible and you have 7m of fittings û which may actually be able to be replaced for 6-7m ISK by the insurer. Player gets *most* (but not all) of his fittings back, EFlac! doesnÆt fork out 10m isk to a potentially scammer.
Quote: How often will a policy need to be renewed?
Depends on the TÆs & CÆs of the policy.
Quote: Can one character insure property on another (alts)?
Again depends on the TÆs & CÆs but my first swipe would say no simply to avoid complexities early on. That way the payments all come from one character, the claims are all made by the same character, and the coverage replacements all go to that same character.
Quote: Will it carry a policy void if killed during war clause?
In current incarnation yes, that was the thought. IÆve got a policy writeup that IÆve been working up that has what the exclusions are (i.e. you wonÆt get paid if youÆre Concorded).
Quote: We can be reasonably sure this isnt a scam as you are likely to make far more money by providing the service, but will you designate someone like ebank to hold funds to cover a % of the policies?
EBank and Fury are absolutely critical mechanisms for this in two ways. The first they confirm to customers that some % of funds are being held on behalf of the insurer to cover potential losses. Second, they give the insurance company a method of generating interest on the captives & premiums that have been paid.
Quote: What happens if you are incapable of managing this, or you are suddenly unable to play?
IÆve asked EBank if they can set up a contingency plan and it seems to think they can. Details would have to be worked out û but say none of the roster of Agents is available for X time û and EBank has instructions to distribute the captives out to all customers (a base refund).
Quote: What happens if you are incapable of paying up?
There goes the business and the rep of the character in a poof of smoke. ThatÆs why I think there should be A) More than one company because competition is good and B) no one should start out trying to insure the entire population of Eve. Building these up from the ground slowly will help expose a lot of faults and limit risk to both sides.
|
Finideach
|
Posted - 2008.04.14 20:46:00 -
[9]
Quote: What causes of losses will you be covering with this?
Mind you things are in the development stage. Any insurance program should have a very clear policy of what is/isn't covered and *how* it's covered. But right now what I'm leaning too for the first offering are the following exclusions:
Losses due to Concord Losses while a character is wardecced Claims made by anyone other than the insured character (i.e. alts, corp mates, alliance mates etc.) Proven connection with suicide gankers (perpetrators) Proven connection with corp thieves Those where there is provable evidence to defraud the insurer Provable isk farmers
That means losses to missioning, pvp, piracy, suicide ganking (victim), ratting etc. would be covered per the policy terms.
About the only causes that would seem to make sense from the economic perspective of the insured/insurer are highsec losses of highend mission ships or frieghters to non-wardecs.
Quote: Individual insurance is only really useful for protecting against unlikely, but catostrophic loss.
Although this is the theory there are many types of insurances that cover non catastrophic losses (health, car etc.) for everyday, if infrequent losses. Where I don't think insurance should get into is the bogus "coverage" of "extended warranties/service plans" that places like Best Buy etc. sell. Catastrophic depends on where you're sitting - for a new pilot 10m might be catastrophic, for the journeyman 100m, for the veteran 1b.
I'm not sure the average of large numbers really works in favor of the insurers in Eve given that there are an infinite number of identities and an infinite ability to hide from the insurer. This is balanced by more frequent losses. Smaller, well qualified groups, may be the key.
Quote: But for insurane to be effective, the premiums must be higher than the average loss devided by the frequency of loss.
Only if you're doing a straight up repayment of ISK method nor gaining any benefit from the premiums as an investment vehicle. The formula I'm using is that:
Investment interest on premium + captive PLUS monthly premiums EXCEEDS replacement cost of items to be replaced (which may be less than the Jita average value)
This means you can manage your margin by effectively sourcing parts with large manufacturers to get a discount from the Jita average. Since you're insuring replacement, rather than repayment, you can keep the difference.
Quote: If I expect to loose a ship every two weeks, which is probably a reasonable rate of loss outside highsec, there is little reason to pay for insurance... (As the price would be so high).
That's why I went about to grab some data - initial results could be found here.
Initial results seem to indicate an average monthly loss of .6/month. Mind you that's a very low sample - and there are many factors that may contribute to that rate which need to be ferreted out.
Quote: Do you plan to offer ship/module products that makes sense for anyone other than CNR(or equiv) mission runners and Freightor pilots?
Since I'm planning on self-funding the prototypes of EFlac! I was actually going to stay away from CNR/Freighter level and focus on the lower market segments. Maybe someone with far deeper pockets can take the method/approach and try to insure the higher end folks - but without a significant IPO or Bond offering (which I'm against for startups) it's too much money.
Quote: It may make a bit more sense for implants.
Only if a good method is found to be able to *prove* that implants were actually lost. As it stands that seems to be a weak area given jump clones. |
Finideach
|
Posted - 2008.04.14 20:48:00 -
[10]
To add to the exclusions of coverage I think I should add there were certain customer groups I was targeting up front:
Must have been in current corporation for at least X months Must have X number of SP Must be at least Y months old Must have a security rating of Z
To even qualify for insurance. Again this is brainstorming and not hard and fast at this point. Data will point at what the best approach is. |
|
Finideach
|
Posted - 2008.04.14 23:21:00 -
[11]
My only concern with WarDec's is that we're entering from a territory of insuring against unanticipated loss into an area where losses not only are anticipated - but an end result of the intended activity. Given that - the data may end up showing that status of WarDec is a poor correlation to property losses and other factors (age of player, type of activitiy etc.) may be a higher correlation.
Keep in mind that these are only very rough preliminary thoughts and outlines for a simple insurance program. There may well be (and I hope are) other players, companies, programs and offerings in the insurance arena.
Indeed I see a natural fit between large mecenary companies and wardec insurance! =)
|
Finideach
|
Posted - 2008.04.15 18:20:00 -
[12]
Quote: Highsec Suicide (victim) Highsec Agro Manipulation (Lofty/Canflip/etc victim) Highsec Can/Wreck Stealing Wardec Lowsec Gate/Station Camp Lowsec other Nullsec Gate/Station Camp Nullsec while Roaming Nullsec while Mining/Ratting
Great feedback. My thought is once I run the initial demographic is to see where the data leads and follow up. What I'm hoping is that some of the demographic information correlates with the loss rate. For example is a veteran player, long vested in their corporation, with good skillpoints - do they suffer less losses (for any of the above reasons) than a newb rookie moving quickly between corps?
Why not cover wardec when you're covering 0.0 already?
I see it as a change of the "odds" you'll get killed. Although traversing through 0.0 may be dangerous - is a wardec MORE dangerous because now not only can you be killed in all sec's, but folks are actively out there trying to kill you?
Don't know.
Trying to get the data to findout. =) I can see some insurance programs where they'd have an exclusion for deaths in 0.0 - but my bet is that they would so limit themselves in favor of the insurer.
If Eve opened up their data streams to data mine - i.e. give me the last 10,000 ship killmails generated and just strip out victim and perpetrator we could mine that and do analysis. Hrm, maybe that's not a bad thing to ask for...but chances are they won't do it.
Also if anyone else wants to setup surveys or data I'd be happy to walk you through it via polldaddy (very simple) and share results.
|
Finideach
|
Posted - 2008.04.15 18:41:00 -
[13]
In the current policy it's anywhere in High Sec that can be reached without traveling through low-sec or 0.0. Any requests to drop off items in areas that don't fit that criteria would be dropped off in Jita. That may still be too large an area and not serve the -5 or worse crowd that can't get into high sec (assuming you even offer them insurance).
When things get advanced I imagine the distribution/delivery of parts would be outsourced to manufacturers who make the parts. In return for moving a few hundred million of business the way of the manufacturer the insurance company could indicate that the parts should be delivered to X at Y. Some manufacturers may have geographical coverage in some areas, others in other.
|
Finideach
|
Posted - 2008.04.15 20:07:00 -
[14]
Do you know of MFG's Hexx who would be wanting to take on the business? I'd much rather outsource manufacturing & delivery to someone who focuses on that as their business model and just request a dropship to the customer or pickup locatoin.
|
Finideach
|
Posted - 2008.04.17 00:43:00 -
[15]
Thanks for the advice MailDeadDrop. Policy in effect is a fantastic suggestion. The key to scam mitigation in Eve seems to make it more trouble than it's worth for the dedicated griefer, and less payout than it's worth for the greedy thief.
Thanks for the link as well.
I really am naive about the manufacturing side of Eve - I just kind of assume there are a dozen or so big name MFGs out there who you can, between working with a few of them, get most of what you need. That's an area that bears a lot of further research.
As for the paid in deductible I had toyed with the concept of a "captive", an amount surrendered by a player up front as collateral against their future good behavior. This amount is kept over time and earns interest for the insurer, at any point that policies are canceled in good faith the captive is refunded. In the event of scamming and/or defraudment the captive is seized by the insurer.
See my post about the need to profile customers - I heartily agree with this. Any insurer who starts out to insure everyone is begging for heartache.
|
Finideach
|
Posted - 2008.04.18 02:38:00 -
[16]
Let me know if they get you the data - I ran the analysis on the 102 respondents I got from the survey and posted the data up in this other thread. Killboard data would help answer some of the questions of "where does ship loss occur by location or security status of system", "what's the pareto of parts most commonly fitted to ships that were destroyed" etc. etc.
I can run either Minitab or SPC XL on the data and do some serious number crunching in short order.
Does KB data have any information about the pilot (like current security status etc.) other than name? |
|
|
|