No. Mutual.Life is not an insurer, but a company that uses technology to provide a platform for people who know each other and have similar risk profiles to associate, forming mutual aid groups, listing their risks and splitting any losses amongst themselves.
Although this principle might bring to mind the origin of Insurance Companies, Mutual.Life itself does not receive "premiums", does not offer guarantees and does not pay damages. All Mutual. Life’s revenue comes exclusively from administrative fees for using the platform.
Thus, mutual aid groups for the coverage of movable and immovable property, life, funeral, health, unemployment benefits and others are all possible through Mutual.Life. It is important to understand that mutual aid is more flexible, less bureaucratic and cheaper than traditional insurance, but it offers a totally different kind of protection, with its own limitations and risks. Assess whether what best suits your needs is an insurance or a mutual aid group.
The cost of protection is as fair and reasonable as possible, that is, it is the total cost of the damages that effectively occurred, shared by the participants, in a way that is fair and proportional to the protected value of each and their own risk score, plus a small administrative fee.
In a traditional insurance company, in addition to compensation costs, about 20% of insurers' revenue goes to administrative expenses and another 20% goes to insurance brokers' commission, which in itself already represents a great saving potential.
Also, in conventional insurance, even if you are very careful about your good, you will always be paying part of the bill of those who are not so careful. Already at Mutual.Life, you can choose people from your closest risk profile and form your own mutual protection group, further reducing your apportionment costs. So, the average cost tends to always be cheaper than an insurance policy, but ultimately it depends on the performance of your group.
You need to be invited by someone who is already in a group, and especially one that you know and trusts you. Only via invitation can you join a Mutual.Life group. In addition, you can start your own group by gathering the minimal amount of people. It is worth mentioning that each group has a specific objective. For example, we can have groups for smartphone protection, motorcycle for delivery workers, groups that only cover repairs, others that also cover robbery and theft, life for extreme sports like free flying, and so on.
Of course, some of these groups are much riskier than others, and mutual trust does not solve the problem of risk, so groups with higher risk profiles will historically generate more losses and will be more expensive for each participant. There is no magic here, but a relationship that is leaner, symmetrical, and fair for all. It is also worth noting that if the risk is high and the insurance products do not meet, this is another reason to seek alternatives to dilute risks and have more security, and this is another of Mutual.Life’s benefits, which allows groups with risk profiles, which are not even admitted by insurance companies, to be formed, enabling models of protection that make sense to the group.
The size of a group can vary greatly, but it can never be too large, otherwise the personal and trustworthy nature of the relationship among its participants will be lost, an important aspect to reduce the asymmetry of information among the participants. An ideal group is a group of about 50 people who know each other and trust each other.
Small groups are easier to maintain mutual trust, however, any losses, which will be rarer because few people, when they occur, will demand more significant contributions, becoming in reality something that is not feasible for many people. It is therefore important to find middle ground between dilution of losses and mutual trust. We are here to help with these choices, but ultimately diluting the losses more or less is a decision of each group when they choose to accept new participants or not.
Mutual.Life works actively to identify fraud and inappropriate behavior by taking all reasonable steps to prevent any kind of activity that violates the terms governing the association of members of the mutual aid group. In addition, we also evaluate reimbursement budgets to assess whether they are within market prices.
However, because it is a mutual aid group, although Mutual.Life points out that there was, for example, recklessness on the part of the participant, the group is still sovereign to approve full or partial indemnities.
Mutual aid is different from insurance because Mutual.Life does not assume the risk of losses, providing the platform and a set of services that allow participants to associate simply, without bureaucracy, within the law and in all safety.
However, although there is no indemnity obligation equivalent to insurance, the group always has a mandatory reserve, able to cover certain events. This reserve is the participants' main safety. In addition, participants who deny indemnities, without plausible justification, may be denounced, and will be evaluated by Mutual.Life which, having confirmed the fact, will take the appropriate measures to restrain and punish those responsible.
We also evaluate the future possibility of contracting reinsurance to protect groups from atypical situations, which generate simultaneous losses in several members, making it impossible to pay full compensation to all involved, as the pro rata values will exceed the limits established for the group.
No. Only if you want to. Each process that awaits approval from the group has a deadline for the group to come forward. Anyone who does not expressly consent will indirectly consent, either to a new participant's entry or to the compensation of an occurred loss.
There are many innovative concepts in the Mutual.Life proposal and, like any startup, we go through a phase of validating our vision and understanding, with the users themselves, how to best serve them. Therefore, the entire development of our platform is based on feedback from our early adopter users.
Our goal is to serve all of Brazil and expand to other countries in Latin America and the world. But to take solid steps and lower our risk exposure, we are working with closed pilot groups. So, at this time we are not open to creating new groups that are not part of our validation roadmap. The profile of our early adopter users are people who believe in Mutual.Life's proposal and wish to be part of a pilot group to mainly contribute ideas and suggestions to improve the platform. But if you have this profile and wish to apply for one of our pilot groups, please register and we will be happy to keep you informed, including you, as soon as possible, in our early adopters program - I want to be an early adopter.
Digital coins and Blockchain technology allow the parties to trade with each other without the need for trust in each other, and without the need for a central authority to ensure the transaction. In addition, it allows for a new degree of transparency and anti-fraud. To Mutual.Life, these technologies have the potential to provide large-scale security for the resources of the groups, which would not remain under the custody of Mutual.Life, but deposited in the smart contracts of the groups, whose rules determine, in a clear and inviolable way, what can be done with the resources.
However, smart contract technology is not developed enough yet to support a product in operation like this. All new technology goes through a period of maturation and bug fixes, and platforms like Ethereum, Rootstock, Counterparty and others are not yet mature enough for such an operation.
Another important aspect is that, when forming a mutual aid group, the resources of the group need to be linked in the form of digital currency (or token) to the smart contract of the group. And in order not to suffer from price fluctuations, more sophisticated transactions will need to be available so that, for example, the group's smart contract be able to deal with another smart contract that hedges the amounts in a fixed income fund or some sufficiently secure asset, without these resources being handled directly by Mutual.Life.
Finally, one last not least important aspect is that digital coins are still very unfriendly technologies. To Mutual.Life, all of these concepts need to be completely transparent to users, who need to be able to protect their private keys and interact with our platform without having to understand Bitcoin, Blockchain or asymmetric cryptographic keys. Several solutions are being developed, but we still need a more user-friendly interface for the general public to be part of this type of solution.
Anyway, this is quite technical, but the bottom line is that Bitcoin's Blockchain technology allows each group to manage its resources without having to trust even Mutual.Life itself, which is great for eliminating a number of security risks that are too costly to mitigate, and make the service, as a whole, more expensive. But for the time being, we are following the technology, hoping that it is in a point of maturity that allows its real application. That is why our current pilot groups do not yet effectively use Blockchain technology, which is used only in R&D, developing proofs of concept and following the development of the various solutions so that we are ready to adopt it when the appropriate moment arrives.