A generic protocol for decentralized insurance applied to a peer-to-peer health insurance network

Insurance today is extremely centralized and therefore characterized by economic and political rent extraction. The distortions caused by asymmetric information, incentive misalignments, and regulatory and political overload have caused an ongoing dramatic increase in premiums, while reducing the quality of coverage.

Tides is a generic peer to peer insurance framework that can disrupt the traditional insurance model. In Tides peer to peer model, the “insurance company” is disintermediated and self-organizing pools of people set their own governance on all aspects of their insurance, such as coverage, limits, terms etc. The critical functions that are aggregated in a traditional insurance “company” are disaggregated and distributed across a decentralized network, essentially removing the company’s ability to extract economic rent while creating incentive structures designed maintain honesty and efficiency of all key insurance
functions.

Moreover, since pools govern themselves, all members are incentivized to exercise judgement in consumption of healthcare resources, as any unspent premium surpluses that they pay are distributed back, based on the pool contract terms. Tides reintroduces price sensitivity and brings a market incentive structure to health insurance.

Tide’s mission is to restore health insurance to being the societal safety net, while making it efficient and decentralized.