Welcome to Mutual.Life's Blog! We are an Insurtech startup who believes that it is possible to rethink the way insurance works, eliminating insurance-insured asymmetries, and providing a fairer, more transparent and simpler experience. We want to not only provide a better user experience but bring stability and security to people who often do not have access to traditional insurance products.
We created this blog to tell you what we are doing, to expose our ideas, our validation experiments, our technology, collect feedbacks, and give our progress visibility. We have a solid vision for the future, but until then, we have a journey with many challenges ahead, and we believe that the more open we are to criticism and questioning, the faster we will overcome them, and the more easily we will develop the different partnerships that we will need along the way.
In this first article we will briefly tell you how the idea of Mutual.Life came about and what our steps have been since we decided to get the idea off the paper a few months ago.
I, Fabricio, am the tech guy. I have more than 15 years of experience, working both in corporate software projects, with large teams and several years of duration, as well as in startups with a super lean team developing mobile apps. At the present moment, my main activity is as a freelance consultant in the field of Data Science and Machine Learning.
The idea of Mutual.Life was born from a systematic research on the major markets that could be impacted by Blockchain technology. I’ve been studying Bitcoin and Blockchain for several years, and as I watched this growing ecosystem, altcoins and platforms like Ethereum come up, Crowdsales, ICOs, and so many other things going on, I was looking to keep updated with technological developments, that Blockchain could really make a difference, and that at the same time was something we could start from scratch, like a startup .I never liked this mindset of "finding a problem that fits that technology," so I avoided focusing on the technology solution itself, but rather on creating value.
The potential of Blockchain's application in the area of insurance is something quite comprehensive and, indeed, quite obvious. Much has already been said and discussed on the subject in technical forums about blockchain. However, it was reading academic articles on economic and social aspects of forming mutual aid groups in low HDI regions as an informal insurance alternative, which gave us the first insights on how Blockchain and mobile technology could be used to solve much of the problems pointed out by the researchers.
In summary, research shows that informal, self-help groups of close and trustworthy risk-dilution groups were most successful when there was a combination of early repayment of risk (a type of monthly payment), and when the funds raised could be applied very flexibly in different circumstances. In addition, some studies point out that the lack of instruments guaranteeing the implementation of the agreement was a problem. As well as security issues relating to the custody of resources. But all this could be made possible through the implementation of smart contracts and other technologies.
At that time, I talked a lot about blockchain with Jó Beduschi, an enterprising friend from the foreign trade area. Jó is more of the management and business field, but he had understood the potential Blockchain had and was determined to develop some business in the area. That was when we sat down to talk and started in June 2016 a series of meetings to outline what would be our first proposal for Mutual.Life. But there were many hypotheses on the table without the least validation.
Our next step was to listen. We looked for advice from experienced market executives, as we interviewed prospective clients to understand how they saw our value proposition. We also prepared our elevator pitch and went face-to-face and collected feedback on some events for startups.
For example, we presented our pitch together with other fintechs at the C4 congress in October this year in São Paulo. I think we could not communicate clearly what the problem we were proposing to solve is, and we left there rethinking our approach. We also participated in the selection process of the accelerator Darwin Starter in Florianopolis. Although we were not on the verge of being accelerated, going through the process would generate important feedback for us, especially since the investment had the participation of CNSeg and CTIP. And indeed, the process was very fruitful. We were questioned by experienced insurance market executives, and we could better identify the loose ends of our project, and come back to the drawing board to fit them.
Mutual.Life is not an insurer because it does not take risks, it does not receive premiums or pay damages. Instead we want to provide a platform that provides the security and transparency necessary for the formation of disintermediated mutual aid groups in Blockchain. But we understand that the Mutual.Life project is broad, and that Blockchain is still an immature technology in many ways, making it difficult for an immediate practical application, especially with the average user. To cite an example, we cannot keep the group resources in Bitcoin or Ether. What the groups needs is something like a fixed income, but it's still too early to expect major banks to offer a fixed-income token in Blockchain. In addition, users are not accustomed to decentralized security, which requires careful attention of their private keys used to sign transactions. So where to start?
Smart contract and blockchain is something that will surely make a lot of difference in Mutual.Life in the near future, but to be able to start with small steps, we decided to focus our first efforts on validating the dynamics of mutual aid groups, even though it was not initially running on Blockchain. We discussed, planned, and even programmed a group simulation application to close the mathematics that governs peer-to-peer protection symmetrically and fairly. Our next step now is to make the lightest possible pilot operation with a closed group feasible, in order to validate if the group dynamics we envision really makes sense to users. Is the value proposition attractive? How will the approval of new members go? What will be the dynamics of contributions? How will the approval of indemnifications be? In which segment(s) should we act?
There is a lot of hype nowadays when talking about Insurtech and Blockchain, and it is relatively easy to attract attention with these buzzwords. But if the value proposition of having an alternative insurance protection through groups of trusted people created in an app is not accepted, it makes no sense to move forward. So, we decided that we need to invest time on validating whether our view of mutual aid groups has a market, and especially to learn from the users themselves how best to make it work. And this is our next mission.
We'd love to hear what you think of what you've heard so far. Your opinion is very important!