AFAM » Sustainable Solutions » C1) Peer-to-Peer Insurance

Affordable and reliable insurance coverage is necessary for every working adult who wants to avoid nasty surprises ruining them financially. This may be especially important for autistics with certain sensory and dietary needs that require them to seek hospitalisation in expensive A/B1 ward classes that the government considers non-essential and thus provides little financial support for.

The autism community has reported many instances of insurers refusing to cover autistic applicants, usually conveyed verbally to avoid leaving a written record. Insurers also insist on treating autism as a mental health disorder, despite the official DSM definitions of autism describing autism as a social disability and executive dysfunction.

Unfortunately, the Singapore government takes a hands-off approach to private insurance which they retained despite various debates. The Monetary Authority of Singapore (MAS) even issued an official statement to support the insurers’ argument that autistics are more likely to be hospitalised and implies that no action will be taken against discriminatory practices. This will cause more autistic people to hide their diagnosis or choose not to get a diagnosis – further worsening the shame and stigma of autism.

In March 2024, the Life Insurance Association (LIA) issued guidelines (under case study #4 and #5) favorable to those with no/low support needs, but remained silent about covering those with high support needs.

In addition, charity crowdfunding is not a substitute for adequate insurance cover.


Summary of Peer-to-Peer Insurance

We can create a non-profit insurance co-operative or social enterprise based on the fire guild insurance concept used in the fifteenth century. Peer-to-Peer Insurance has already been successfully implemented by disruptive businesses such as FriendInsurance and Laka. Like Peer-to-Peer Lending platforms, funds can be held in escrow by a reputable third party (such as Vistra) to ensure that any potential financial issues with the co-op will not affect the policyholders.

Operating on a cost-recovery basis, this insurance will provide fixed-term renewable insurance contracts that complement any existing insurance. Using both an autistic and a non-autistic control group, we will collect objective claims data that can be used to dispute the assumption that insuring autistics is risky.


How Peer-to-Peer Insurance can get started

Its first offering can be hospitalisation cash insurance, which complements existing hospitalisation insurance while excluding any medical treatment that can lead to unpredictable costs. An example of what it might look like:

  • 5,000 policyholders each contribute a $200 deposit to amass $1,000,000 to start a month-long contract.
  • After subtracting operating costs and claims, the unused deposit rolls over to the next month if policyholders choose to renew.
  • If policyholders choose not to renew, they are refunded the unused deposit.
  • Each applicant only needs to top up the difference between their entry deposit and unused deposit.
  • To reduce administrative and transaction costs, policymakers only need to top-up when the difference exceeds $10.
  • Payouts start on the first day of hospitalisation; paid in cash via bank deposit on the same day even if it is a non-working day.
  • Payouts are set to TTSH’s A1 Acute Ward (currently $457/day).
  • Payouts remain the same no matter actual ward class used, private hospitals or other insurance policy payouts.
  • Payouts will only be made for medically essential hospital admissions within Singapore.
  • Payouts will only be made for the first day of hospitalisation for events that cause more than 1% of policyholders within the same pool to be hospitalised.
  • Examples of such events include epidemics, mass food poisoning, major industrial/transportation/sports accidents, natural disasters, criminal/terrorist attacks, and riots/war/war-like events.
  • Claims have to be made within 30 days from the date of the initial hospital admission.
  • If the hospital admission is in one month but claims are made in the next month, it will be counted under that next month’s contract’s terms and conditions.
  • Claims will be settled on a first-come-first-serve basis based on fund availability.
  • There will be a maximum claim limit of 60 days per incident and a lifetime claim limit of 180 days.
  • The system is fully transparent: policyholders can check updated claim information and fund statistics
  • There will be 3 independent pools of applicants sorted into low/middle/high risk profiles based on their age, health condition and life activities.
  • Autistics with no private hospitalisation insurance can pay double for double cover.
  • Caregivers and family members of autistics can be covered too; they are the control group.
  • Policyholders would have “voted” in advance at signup/renewal on their decision for the next contract renewal in case of funding shortfalls or excesses.
  • The collective decision (e.g. increase/decrease payouts) will be announced after the current renewal and then put in effect for the next renewal.


How Peer-to-Peer Insurance is financially viable

The above Peer-to-Peer insurance does not rely on actuarial modelling, which is inherently discriminatory.

As an example, with operating expenses of $10,000 per month for 5,000 policyholders, each policyholder will pay $2 per month.

Therefore, all policyholders get back $198 for the first month from the $200 deposit if there are no claims.

Assuming a realistic average stay of 3 days, it will take 722 claims (14.4% hospitalisation rate) to exhaust the $1,000,000 fund.

If there is are 50 claims lasting 3 days (reflecting a realistic 1% hospitalisation rate), it will cost $457x3x50=$68,550.

With 5,000 policyholders, each will pay $13.71 for that month.

In contrast, a commercially available hospitalisation cash policy charges $905/year ($75/month) for policyholders between 41-50 years old, paying out $300-$600 per day for a maximum of 60-500 days with a lifetime limit of $225,000.


The Potential of Peer-to-Peer Insurance

A successful trial run will allow the creation of other types of health insurance based on the same co-op concept, eventually providing substitutes for all the mainstream insurance policies that autistics are denied.

A very urgently needed insurance is Total & Permanent Disability (TPD) which is usually denied to the disability community. We can also expand on medical coverage with an insurance policy to cover early critical illnesses and another to cover mental health hospitalisation.

If this platform can be extended to the mainstream, everyone can have the freedom to create their own insurance peer groups with customised policies without discrimination from insurers.

Our offerings can appeal to people with pre-existing conditions (e.g. recovered cancer patients) as well as migrant workers and domestic helpers whose employers wish to supplement the low insurance cover offered by mainstream insurers.

Just like how DBS refers small businesses that are unable to qualify for its loans to selected Peer-to-Peer Lending Platforms, partner insurers can also refer clients that do not qualify for their insurance cover to this insurance co-op.


Implementing Peer-to-Peer Insurance

Firstly, we lobby the government to legalise Peer-to-Peer Insurance as part of innovative financial solutions. The insurance industry is heavily regulated. Some of these requirements and rules are both unnecessary and hostile to this new business model.

Secondly, we form a team of interested people to run the insurance programme either as co-op or a fintech startup.

  • Operations Manager: A person experienced in running a multi-million business or organisation
  • Financial Advisor: A person experienced working in the insurance industry
  • Legal Expert: A lawyer well versed in business law
  • Venture Capitalist: Someone to supply the capital to build the systems for automating the application, billing and claims processes which are more complex than for traditional insurance

Thirdly, we obtain a critical mass of people willing to try this new insurance model so that we have enough risk pooling. There should be no less than 5000 people in each risk pool. The autism and mental health community, both long suffering from insurer discrimination, can pilot this.

Lastly, we can obtain reinsurance to ensure that all policyholders can still receive payouts even if the number of claims exceed what the risk pooling system is able to handle.


Tackling Insurer Discrimination

The mainstream insurers argue that insuring autistics at standard life (i.e. same terms and rates as typical people) is a form of subsidy. Eric disagrees and believes that the apparent poorer health outcomes of autistics is mainly due to autism being confounded with its co-morbids (e.g. mental health disorders, intellectual disability).

Correlation is not causation. Autism is defined by the triad of impairments (i.e. social, communication, executive functioning). Although it makes autistics vulnerable to poor health due to social causes (e.g. bullying/abuse resulting in mental illnesses), it is neither a biomedical condition nor a mental health condition, thus it does not cause poorer health outcomes per se.

To refuse to insure or to impose exploitative terms on an entire group of citizens simply because they show a higher risk is discrimination. If this was done to members of minority racial, religious and socioeconomic groups who likewise exhibit higher risks of poor health due to social causes, it would have caused an uproar.

Autism is a cultural identity as well as a learning disability for social skills; it should not even be a criteria that needs declaration on insurance applications. This insurance initiative avoids presuming the risk levels of people based on membership of certain social classes or labels, but solely on their risky behaviours (e.g. smokers, extreme sports enthusiasts, taking drugs/medication likely to cause side effects) and relevant medical status (e.g. biological age, frequency of visiting doctors, past hospitalisation incidents).

By cutting out uncertainty (with fixed and limited maximum payouts), we can provide more flexibility to policyholders on how to use their payout funds while preventing them from abusing the insurer with unnecessary and expensive procedures. By streamlining terms, removing complicated procedures and eliminating agent commissions, we can provide cheaper insurance with greater coverage, making it attractive for non-autistic people to join too.