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Collaborative Insurance Sustainability and Network Structure


  • Arthur Charpentier
  • Lariosse Kouakou
  • Matthias Lowe
  • Philipp Ratz
  • Franck Vermet


The peer-to-peer (P2P) economy has been growing with the advent of the Internet, with well known brands such as Uber or Airbnb being examples thereof. In the insurance sector the approach is still in its infancy, but some companies have started to explore P2P-based collaborative insurance products (eg. Lemonade in the U.S. or Inspeer in France). The actuarial literature only recently started to consider those risk sharing mechanisms, as in Denuit and Robert (2021) or Feng et al. (2021). In this paper, describe and analyse such a P2P product, with some reciprocal risk sharing contracts. Here, we consider the case where policyholders still have an insurance contract, but the first self-insurance layer, below the deductible, can be shared with friends. We study the impact of the shape of the network (through the distribution of degrees) on the risk reduction. We consider also some optimal setting of the reciprocal commitments, and discuss the introduction of contracts with friends of friends to mitigate some possible drawbacks of having people without enough connections to exchange risks.

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  • Arthur Charpentier & Lariosse Kouakou & Matthias Lowe & Philipp Ratz & Franck Vermet, 2021. "Collaborative Insurance Sustainability and Network Structure," Papers 2107.02764,, revised Sep 2022.
  • Handle: RePEc:arx:papers:2107.02764

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    References listed on IDEAS

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    Cited by:

    1. Runhuan Feng & Chongda Liu & Stephen Taylor, 2023. "Peer-to-peer risk sharing with an application to flood risk pooling," Annals of Operations Research, Springer, vol. 321(1), pages 813-842, February.

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