Nexus have been working with Regis Mutual Management to develop a new mutual offering smart contract cover to secure risk and protect against bugs in smart contract codes. Regis have been working with Nexus to explore mutuality and how it can be used to redesign insurance.
Nexus Mutual uses the power of Ethereum so people can share risk together without the need for an insurance company.
Nexus Mutual is building a decentralised alternative to insurance. Nexus will use blockchain technology to build a discretionary mutual (a risk sharing pool) and create a “people-powered alternative to insurance”. The platform is built on the Ethereum public chain and allows anyone to become a member and buy cover. It replaces the idea of a traditional insurance company, because it is wholly owned by the members. The model encourages engagement as members will get economic incentives for participating in Risk Assessment, Claims Assessment and Governance.
Initially, Nexus has launched with only one product: Smart Contract Cover. The purpose is to provide the Ethereum community with protection against hacks in the value-storing applications (known as smart contracts). The product will cover “unintended uses of code” where someone, not necessarily the cover purchaser, has suffered a financial loss on a smart contract. For example, the cover is intended to pay-out on events like the DAO hack, and the two Parity multi-signature wallet issues.
Down the line, Nexus plans to move into more mainstream products such as providing crypto wallet cover and protection against earthquake risks.
As a discretionary mutual, Nexus Mutual doesn’t approve or reject claims the way a regular insurance company would. Instead, claims are decided via the member voting process. Nexus Mutual provides a platform where members can act as Claims Assessors by voting on claims submitted by other members.
The members voting have full discretion on whether to pay a claim or not. While there is no opportunity to escalate a claim to any regulator or ombudsman the benefit is increased flexibility. Members can decide to pay claims as they wish, including by applying their discretion in a positive way. This might include paying claims which could be declined according to strict terms and conditions but where there is a genuine loss.
Hugh Karp, Founder said, “Our aim is to provide our members with more simple, transparent, accessible and cheaper financial protection against their risks. The Mutual allows the Ethereum community to share a critical risk with each other. The Mutual framework means we can hand control back to the Members.”
Regis Mutual Management’s CEO Paul Koronka said, “It has been fascinating to work with Nexus to support their vision to launch a decentralised mutual for Smart Contracts. Like Hugh, we are passionate about offering more choice in risk management and creating products that go back to the heart of sharing risk – a collective group supporting each other. We are looking forward to exploring the methods of consumer behaviour and the integration of blockchain technology in mutuals’.
Find out more about Nexus here.