Do Tradition and Innovation Mix? The benefits and risks of peer-to-peer insurance for consumers


Annik Bélanger-Krams


Option consommateurs




In recent years, digital peer-to-peer (P2P) insurance platforms have become prominent in Canada. There are primarily three categories of P2P platforms: those that act like brokers, those that act like insurance companies, and those that follow a self-governance model. The self-governance model is made up entirely of consumers. It is they who make all the decisions and assume all the risks. P2P platforms offer consumers a wide array of advantages, including faster service, greater savings, and more autonomy. However, they also leave consumers vulnerable to several risks, including misunderstanding about the product being offered, hasty decision making, and even fraud. These risks can be greatly intensified if the P2P platform is not registered with the regulator and subject to the requisite oversight. Consumers may find themselves without recourse options in cases where a majority of the group opposes compensation.

The regulation of the insurance industry has three primary objectives: to guarantee the stability of the financial system, to oversee certified representatives, and to ensure that consumers are protected by providing them with opportunities for remediation. This study conducted by Option consommateurs (OC) reveals that P2P platforms do perform services reserved for insurance companies, but are not always registered as such. Option consommateurs recommends that regulators take a more proactive role in ensuring that no P2P platform operates without the necessary permits, that all P2P platforms respect the regulations, and finally, that consumers exercise a high degree of caution when using these services.

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OCA Funded Research
This research received funding support through the Office of Consumer Affairs' Contributions Program.

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Source: Consumer Policy Research Database

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