P2P insurance does not make one an insurer

THERE'S a new fad in town and it's called the peer-to-peer (P2P) insurance platform that looks like an insurer and behaves quite like one, except that, to the regulator, it isn't.

Take the month-old startup Bandboo, a blockchain-enabled unemployment-insurance platform where its members pool money to insure one another and split the claims when a fellow member loses his/her job.

In explaining its business model and products, common insurance terms including premium, claim and insurance, are used liberally. The startup also compares itself with a traditional insurer but adds that its block chain technology promotes transparency, something the latter lacks.