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Aluin Chaput
Caldari
The Monad Family
La Cosa Nostra Alliance
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Posted - 2009.01.04 04:49:00 -
[1]
Edited by: Aluin Chaput on 04/01/2009 04:53:50
With Concord Insurance still alive and kicking, any potential Insurance businesses need to go other routes. This is why I come to Mod Insurance... I believe it could have great potential. However I want to see MD's opinion on this, as I am only human, and therefor cannot see the full picture.
Here is a quick list of Pros and Cons for the business:
Pros:
* Potential to invest Customers ISK into market until a claim is made
* Large pool of potential Customers
Cons:
* Highly specialized software needed for verification on claims.
* High volatility in lifetime of Mods (seconds to months.)
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Breaker77
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Posted - 2009.01.04 05:05:00 -
[2]
 Originally by: Aluin Chaput
Cons:
* Highly specialized software needed for verification on claims.
Killmails can be faked quite easily.
Does the full API show kills/losses??
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Aluin Chaput
Caldari
The Monad Family
La Cosa Nostra Alliance
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Posted - 2009.01.04 05:10:00 -
[3]
I would believe so, but as I have never played around with it, I don't know. It would be a lot harder to do it you couldn't truly verify claims, though.
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cosmoray
Cosmoray Construction
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Posted - 2009.01.04 06:48:00 -
[4]
This was looked into seriously about a year ago. There was a large discussion on MD forum.
With API verification required it would be incredibly time consuming for the insurer to do the checking.
Not worth the time and effort for the return.
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mastergamer
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Posted - 2009.01.04 11:43:00 -
[5]
OP, if you seriously want to consider this I can help with the API verification (for a fee, of course). Contact me in game.
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Marc Isabel
Noir.
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Posted - 2009.01.04 13:02:00 -
[6]
Also, since on ship destruction half its modules are dropped, payout can never be over 50% to avoid insurance scams.
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Tiirae
The New Era
HUZZAH FEDERATION
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Posted - 2009.01.04 13:34:00 -
[7]
My gut reaction is that it can't work, because the item being insured will almost certainly be destroyed at some point. How could you insure a car if all cars were eventually stolen?
Of course you are only interested in the length of time the insurance is supposed to cover, but presumably once that's over they will re-subscribe. I'm sure you will have a near-100% claim rate at the end of the day. Which means the premium will need to be somewhere between 50% and 100% of the value of the item.
Sounds unworkable.
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Akita T
Caldari Navy Volunteer Task Force
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Posted - 2009.01.04 14:04:00 -
[8]
You could theoretically start an insurance on DESTROYED modules only (stuff that drops in the wreck, no refunds for obvious reasons).
It can be done, even fully automatic, and it wouldn't even be all that hard.
However, like some people pointed out, you would either not have any customers at all (due to a much too high needed premium OR the rest of the conditions for the insurance) or would go bankrupt very fast (since you couldn't affort to pay out all valid claims made).
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Create a character || Fit a ship || Get some ISK |
Breaker77
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Posted - 2009.01.04 14:38:00 -
[9]
Another point to consider is this.
With the talk of them removing ship insurance payouts if you get blown up by concord, would you still payout for that as well if it is removed??
hmmm, maybe there might be a market for this after all, at least with private insurance on ships for suicide gankers in high sec.
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Aluin Chaput
Caldari
The Monad Family
La Cosa Nostra Alliance
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Posted - 2009.01.04 17:51:00 -
[10]
Edited by: Aluin Chaput on 04/01/2009 17:56:03
Edited by: Aluin Chaput on 04/01/2009 17:52:49
Originally by: cosmoray
This was looked into seriously about a year ago. There was a large discussion on MD forum.
With API verification required it would be incredibly time consuming for the insurer to do the checking.
Not worth the time and effort for the return.
Yeah, I remember hearing about the discussion... I think you could write up a program to check somebodies kill mails, ect, and see if it is a valid claim. You could then see what Mods where destroyed to get the payout.
Originally by: mastergamer
OP, if you seriously want to consider this I can help with the API verification (for a fee, of course). Contact me in game.
If you are serious with helping me with verification, I will contact you. I am thinking an automated program, just so you know.
Originally by: Marc Isabel
Also, since on ship destruction half its modules are dropped, payout can never be over 50% to avoid insurance scams.
I would eventually like to be able to verify at a level that we could give full payout, but for the time being insurance of destroyed Mods would be best.
Originally by: Tiirae
My gut reaction is that it can't work, because the item being insured will almost certainly be destroyed at some point. How could you insure a car if all cars were eventually stolen?
Of course you are only interested in the length of time the insurance is supposed to cover, but presumably once that's over they will re-subscribe. I'm sure you will have a near-100% claim rate at the end of the day. Which means the premium will need to be somewhere between 50% and 100% of the value of the item.
Sounds unworkable.
The premium wold be around 30% item cost, with weekly payments based on how risky you are, ect. We will tailor your insurance policy so that it fits your situation. A wannabe Pirate is going going to have a higher weekly rate then the leader of The Tuskers. This allows us to get the right amount of ISK from everybody, so that we can pay everyone's claims.
Now, to your second issue with Mod Insurance. Yes, there will most likely be a 85% claim rate on all mods. I only put it that low because I know somebody is going to sell a mod, or break their contract at some point.
We would make our profit in between the time, when we don't have to pay your claim. You are still giving us ISK, so we can do any number of things to make it grow.
1: Put it in a bank. They know what they are doing, and we will get a fixed rate of return.
2: Invest it on our own. This allows us to get as much ISK out of it as we can make.
3: Put it into random short term IPO's. This is more risky, as we can't pull out whenever we want.
Originally by: Akita T
You could theoretically start an insurance on DESTROYED modules only (stuff that drops in the wreck, no refunds for obvious reasons).
It can be done, even fully automatic, and it wouldn't even be all that hard.
However, like some people pointed out, you would either not have any customers at all (due to a much too high needed premium OR the rest of the conditions for the insurance) or would go bankrupt very fast (since you couldn't affort to pay out all valid claims made).
See my other responses, I think I have my bases well covered.
Originally by: Breaker77
Another point to consider is this.
With the talk of them removing ship insurance payouts if you get blown up by concord, would you still payout for that as well if it is removed??
hmmm, maybe there might be a market for this after all, at least with private insurance on ships for suicide gankers in high sec.
My end goal would be to insure most everything.
Yeah, Mercs, Miners, Pirates, everybody wants to keep ISK in their wallet.
______________________________________________________________________________________
I am actively looking for a Web designer, A good Programmer, Traders, people in general who can come up with good ideas, stress test the system, and keep things running smooth.
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Aluin Chaput
Caldari
The Monad Family
La Cosa Nostra Alliance
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Posted - 2009.01.04 20:01:00 -
[11]
I am going to make this real, and run a week long test wish some high risk (0.0) guinea pigs. If you want to make donations to the test, feel free. I intend to take it all the way, so we can finally topple Concord insurance, and get the industry in the hands of the players.
This test will not show the level of accuracy needed to fully understand the profitability of this business venture, but it will show most of the factors. What I want to achieve from this test is simple. I want to figure out how long on average it takes between the policy being taken out, and the claim being made. I will also use this period to make a test to determine how much each pilot should be charged weekly.
If you are interested in working on this, please EVE mail me or post in this thread, giving me a basic idea of what you are good at, ect.
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Akita T
Caldari Navy Volunteer Task Force
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Posted - 2009.01.04 20:08:00 -
[12]
Originally by: Aluin Chaput
See my other responses, I think I have my bases well covered.
Actually, that's what we were trying to tell you in a nice way... you don't.
With a 30% weekly starter premium, that's already a pretty damned high cost.
You WON'T be getting any clients that plan to stick around to reinsure the mod, most of them will be claiming it as soon as it pops. If you raise the premium for them, there would be no point in them coming back, since they might end up paying almost as much as for a new one.
As for the clients you would like to have as a client, the initial rate makes sure nearly none of them would even consider you.
Overall, you will be experiencing a very quick NEGATIVE cashflow balance, and you will go bankrupt.
Quote:
My end goal would be to insure most everything.
Yeah, Mercs, Miners, Pirates, everybody wants to keep ISK in their wallet.
And that's exactly why people in low-risk areas won't bother coming to you, while you can't afford to make a business on the high-risk ones.
No matter how you put it, in both the short and long run, it just can't possibly work. The game mechanics forbid it from being feasable.
___
Ok, let's assume for a second that you are right and I'm ron, and it might just work.
Practical example time ! Your first two clients...
You have somebody who seems to be a mission-runner and wants to insure his officer-fit mission-boat, with a module value of around 10 bil ISK. How much do you ask for, how much do you pay out for a claim where half the mods were destroyed, and how much does the rate go down if no claims are made and he wants to re-apply for insurance ?
Then you have another guy, who seems to be a PvPer. He wants to insure his 25 mil ISK fit. Same set of questions.
Now... ask yourself... would you be one of those guys, with the answers given by you, WOULD you get the insurance ?
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Create a character || Fit a ship || Get some ISK |
Xabier
Amarr
THE SORORITY
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Posted - 2009.01.04 20:27:00 -
[13]
Edited by: Xabier on 04/01/2009 20:27:27
Originally by: Aluin Chaput
Edited by: Aluin Chaput on 04/01/2009 04:53:50
With Concord Insurance still alive and kicking, any potential Insurance businesses need to go other routes. This is why I come to Mod Insurance... I believe it could have great potential. However I want to see MD's opinion on this, as I am only human, and therefor cannot see the full picture.
Here is a quick list of Pros and Cons for the business:
Pros:
* Potential to invest Customers ISK into market until a claim is made
* Large pool of potential Customers
Cons:
* Highly specialized software needed for verification on claims.
* High volatility in lifetime of Mods (seconds to months.)
It won't work simply because how do you value an individual item like a officer mod?
If you taking say 30% of a ships mods value as its base premium your talking say 5-10bn for some decent officer fitted battleship setups, will people trust you with the isk?
Whats to stop you scamming or pulling a ponzi scheme?
Xabiers Capital Bond #1/2 (FINISHED)
Xabiers Capital Bond #3/4
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Aluin Chaput
Caldari
The Monad Family
La Cosa Nostra Alliance
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Posted - 2009.01.04 20:39:00 -
[14]
Originally by: Xabier
It won't work simply because how do you value an individual item like a officer mod?
If you taking say 30% of a ships mods value as its base premium your talking say 5-10bn for some decent officer fitted battleship setups, will people trust you with the isk?
Whats to stop you scamming or pulling a ponzi scheme?
Well, there is the problem. I would probably have 100% of every bodies ISK in DBank, or EBank, for trust reasons. However, I would eventually like to get enough trust that people would let me use the assets for a bit riskier things.
I would have to ask, but I would bet that I could set up an account in one of the banks that couldn't be opened unless a few people all agreed.
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Kazzac Elentria
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Posted - 2009.01.04 21:56:00 -
[15]
The best answer since we covered this a few months back, was that your only profitable client is going to be your mission runners and carebears. Since they pop the least, even in the real world insurance companies LOVE people who don't file claims. In fact their best customers are people who pay their premiums for years without ever filing a claim.
You'll never be able to fully insure everything either, to do so would mean immediate business failure once your first batch of claims get processed.
The other issue is, how much isk do you think you can profit from this? Most insurance companies don't make the bulk of their money on the actual premiums. They make it by gambling that they'll have your premiums long enough to invest it into something in between claims.
Will the amount of effort required to manage, run, and process your contracts be worth the amount of isk you might stand to make?
...not likely. You'd honestly have an easier time getting vetted for a speculation IPO raising a billion or two here and dropping into some trade aspect for a month. Much less work and much more pay off.
...that is until some fundamental items in game change that allow us some measure of enforcement in contracts. Once that occurs then yes, I could honestly see a player run insurance business be feasible. Its even been mentioned that its part of the dev dream to undo concord and give it up to the players. |
Aluin Chaput
Caldari
The Monad Family
La Cosa Nostra Alliance
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Posted - 2009.01.04 23:18:00 -
[16]
Kazzac, you do have a very good point.
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eVaLF
Delivery Luck
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Posted - 2009.01.04 23:43:00 -
[17]
The purpose of insuring is so you get back more than you paid into insurance.
The reason the system already in place works is because CCP has unlimted Isk.
Example - I insure my Jump Freighter. You charge me 2bil isk. I lose my jump frighter you would have to pay me atleast 4bil isk meaning you lose isk. If I don't get more than I put into the insurance what was the point?
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POS FUEL DELIVERY & HIGH SEC FREIGHTER SERVICES |
cosmoray
Cosmoray Construction
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Posted - 2009.01.05 01:29:00 -
[18]
There were two serious discussions I could find that occured early 2008. The testing and theories didn't work out:
link 1
link 2
The theory doesn't really work for the amount of auditing involved.
If you buy insurance only an API audit will confirm the need for insurance payout.
If I remeber correctly the best opportunity identified was for 'make up' insurance. The difference between Concord insurance and re-purchase value on T2 ships.
Your best customers were really miners who may want to avoid getting ganked.
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Aluin Chaput
Caldari
The Monad Family
La Cosa Nostra Alliance
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Posted - 2009.01.05 01:36:00 -
[19]
Just wondering as I haven't fully read both threads yet, couldn't you make a program to audit the player? If that was a possibility, you would just have to work out rates, ect.
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Kylar Renpurs
Dusk Blade
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Posted - 2009.01.05 04:50:00 -
[20]
quoting myself but hey, gotta do something wierd for my first post in a month.
Quote:
I'll certainly be writing a spot of trial code soon,,, not tonite. Cooking salmon steaks
those were damn good salmon steaks! Chilli lime salmon pasta,, mmmmm!
But seriously,
Quote:
This was looked into seriously about a year ago. There was a large discussion on MD forum.
With API verification required it would be incredibly time consuming for the insurer to do the checking.
I never got around to writing the code, but with a daily dump of client API info and some nice concise python code pumping it into a database, with an effective query mechanism would be cake.
I write software for Plone and off the top of my head with about 4 hours to spare I could write a product for it that achieves this with a nice shiny GUI and very snappy query and report mechanisms for all your customers, automate the date-expiry of policy purchases and provide a simple interface to manage claims and customers.
All the customer would have to do to make a claim is EVE-mail a 'teller' (or even report it as a 'user' in the insurance database, in the case of Plone) the killmail ID or other info such as date etc. and the character it's for.
The difficulties I identified which stop me doing this is:
- Programming is my career, it's the last thing I want to do when I get home or if it's the weekend.
- E-Bank has a max one-hour response time on all withdrawal requests. I just don't have the friends (  ) or the time to do this.
- I dont have enough friends or time to make use of capital from premiums to cover the 'gap' in insurance premiums. That is to say, on a policy costing 4 million paying out 12 million, you need to make 8 million before you hit the 'pure profit' stage.
With that last point, the policies you come up with are crucial to this. Obviously concord-esque insurance is unusable since people would insure and claim, especially in wartimes, before you could make that profit.
An example policy could be to have a no-claim period of 7 days on a 3 month insurance policy, where if they make a claim within 7 days of the policy start date, they won't recieve the ISK till after 7 days.
You would also need policies in place to restrict options if claims are too frequent, something which could also be automated by the software.
As opposed to the 'carebear/industrialist-only' view of insurance, I think for people in a war, a bulk insurance pack on, say, 10 interceptors could work nicely in that you waste all 10 interceptors during the fighting, and 7 days later (when it's all gone quiet again anyway) you then get the ISK. A nice delayed refund if you like. A good 'if you've got isk to waste' option which people seem so keen on doing these days.
Is this an optimal ISK making method? No. Is it an untapped resource? Yes.
PS. I realise i went on to talk T2 insurance, not module, but it'd work the same.
Improve Market Competition! |
Aluin Chaput
Caldari
The Monad Family
La Cosa Nostra Alliance
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Posted - 2009.01.05 20:39:00 -
[21]
Kylar, I am extremely impressed. Could you write the code? I know it would be a bit of work, but this would get you into what could be the first real insurance company in EVE.
I love your ideas, and at the very least, if you don't mind, I would like to steal most of them.
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Rho'varo
Minmatar
Diversified Operational Services
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Posted - 2009.01.05 21:47:00 -
[22]
I won't repost what I wrote last quarter, but here's a brief summary: since you need data to build models for 'underwriting risk', it might be simpler to base establish an insurance business on 'investment income' and then later add 'underwriting income' when you have the data (more details in a brainstorming-type flavour on the other side of that link).
á
á
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Kazzac Elentria
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Posted - 2009.01.05 21:56:00 -
[23]
Originally by: Rho'varo
I won't repost what I wrote last quarter, but here's a brief summary: since you need data to build models for 'underwriting risk', it might be simpler to base establish an insurance business on 'investment income' and then later add 'underwriting income' when you have the data (more details in a brainstorming-type flavour on the other side of that link).
I like Rho's line of thought, getting the investment model down and then expanding into the underwriting side could open new avenues you might not have thought of. |
Aluin Chaput
Caldari
The Monad Family
La Cosa Nostra Alliance
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Posted - 2009.01.06 02:59:00 -
[24]
Yeah, I am really glad I made this thread. The entire concept of giving people delayed returns on their claims is amazing, and simple. I would make two account types, one delayed, one within a day. The one that was delayed would have to pay a lower premium, ect.
I really need somebody to write the code.
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Kylar Renpurs
Dusk Blade
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Posted - 2009.01.06 03:04:00 -
[25]
Originally by: Aluin Chaput
Kylar, I am extremely impressed. Could you write the code? I know it would be a bit of work, but this would get you into what could be the first real insurance company in EVE.
I love your ideas, and at the very least, if you don't mind, I would like to steal most of them.
I would give it a crack, but for RL reasons it wouldn't be for several months.
Improve Market Competition! |
Aluin Chaput
Caldari
The Monad Family
La Cosa Nostra Alliance
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Posted - 2009.01.06 20:10:00 -
[26]
Ah, I see.
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nether void
Caldari
Shrapnel Industries
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Posted - 2009.01.06 20:29:00 -
[27]
Insurance only works when either the amount needed to pay to rectify an uninsured situation is highly variable (on the high end) and/or if the ability to sue exists. Both of those are not the case with modules and ship popping in this game.
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Lui Kai
Better Than You
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Posted - 2009.01.06 21:12:00 -
[28]
Edited by: Lui Kai on 06/01/2009 21:13:15
I honestly don't know how viable insurance would be, but an idea occured to me if you're intending to go forward with this:
Reduce insurance payout for low/nilsec deaths.
And
Provide an option to insure cargo, not just modules.
The primary profitable market for this would be people afraid of being suicide ganked. IE: Mission runners and freighter pilots.
Mission runners would be happy with just module insurance - but if the payout is a significant portion of the module cost, many would take up lowsec missioning, and you'd be bust in no time.
Freighter pilots are famously paranoid (understandably) of the suicide gank, and would gladly pay out for some type of insurance against it, but your business model ignores them. From an implimentation standpoint, just sell a flat coverage - Y isk cargo insured for Z monthly fee - for a flat premium, rather than trying to insure each individual cargo. Then, if they're popped, do a market evaluation on their killmail losses and payout an according percentage (or the total policy amount if the cargo was worth more than the policy covers).
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Shar Tegral
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Posted - 2009.01.06 21:15:00 -
[29]
Aluin, a line of hyphens or underscores can break the forums for people using large fonts or other handicap accessibility options.
Try using the end quote tag, [/quote], to get this line instead:
It also helps as it takes less characters to make a header rule line and thus you can fit more in your signature block.
To Shar -verb:
1 - To say what you mean.
2 - To say what it means.
3 - To say something mean. |
Aluin Chaput
Caldari
The Monad Family
La Cosa Nostra Alliance
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Posted - 2009.01.06 21:33:00 -
[30]
Thanks for the advice.
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