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EFSI SencneS
Posted - 2011.07.01 16:38:00 - [1]
 

EVE Insurance is currently in a Beta testing stage insuring Hulk and Mackinaw ships. We're considering expanding into Tech III Strategic Cruises. The insurance policies are generally based around the way the In-Game insurance is handled. Here is a list of the basics:-

1) Term is 90 days, just as in-game insurance is 90 days.
2) Policy is active on any one ship destruction within the term limits. Meaning EVE Insurance is coving the ship you insure regardless of if it was re-packed, sold and a new one purchased, someone gives you a ship to use and you lose it.
3) You must be piloting the ship at the time of destruction (This is confirmed via API). This also means if you lose a ship you're transporting that does not count (We are working on recognizing that loss on kill mails, however for the moment destroyed cargo does not trigger the system to issue a payout.)
4) You can cover multiple accounts and characters from a single policy. Meaning, if you have three characters that can fly the insured ship, the system takes the first killmail from all covered characters/accounts and issues a payment to that account. If you have multiple policies across multiple accounts and characters and you lose a fleet of insured ships the payment is issued one ship per policy.

These four points I felt important to mention before I ask GD some questions. The insurance policy premium and payout are based on a formula created to prevent/lower greifing potential of EVE Insurance, due to the price of a T3 Cruiser; the policy premium would be around 170 million ISK, with a payout of around 380 million ISK. The question I have for GD is:-

Q) Is this an unreasonable price for insurance on a ship that costs almost a half billion ISK (Inc. mods) but in-game insurance only pays out under 10 million ISK?

Remember this is a 90 day term, or on first ship destruction whichever happens first. Meaning for continued coverage, it would require another 170 Million ISK. This may change to give rebates to continued insurance but for the moment the policies are set.

Q) If 170 million ISK premiums for a 380 million ISK payout is unreasonable, may we have what you would pay and expect from a Tech III Strategic Cruiser Insurance Policy?

EFSI SencneS
EVE Insurance

Ingvar Angst
Amarr
Nasty Pope Holding Corp
Talocan United
Posted - 2011.07.01 16:41:00 - [2]
 

Why do I suddenly recall a story of a guy that ran a bank in Eve some time back?

Mr Epeen
It's All About Me
Posted - 2011.07.01 16:43:00 - [3]
 

First thing you do is contact Chribba.

Give him 50 or 60 billion to hold in escrow.

Then come back here and people may...MAY... take you seriously.

Hexxx
Minmatar
Posted - 2011.07.01 16:44:00 - [4]
 

Originally by: Ingvar Angst
Why do I suddenly recall a story of a guy that ran a bank in Eve some time back?


Because Sencnes and I were both part of that, I wrote the code then, and using all of the lessons we learned during that debacle, we're trying to run another project (caveat - no Australians). But we're not here to ask you to buy insurance.

We're asking for people to give us some kind of idea on if we're designing the policies correctly, if the price makes sense, if the terms are reasonable, that kind of thing.



EFSI SencneS
Posted - 2011.07.01 16:51:00 - [5]
 

Edited by: EFSI SencneS on 01/07/2011 16:52:17
Originally by: Hexxx
We're asking for people to give us some kind of idea on if we're designing the policies correctly, if the price makes sense, if the terms are reasonable, that kind of thing.


Hexxx is the primary programmer and co-owner the EVE Insurance project.

This is exactly correct, we're not selling insurance, this is not a sales thread. This is a question thread about what would people pay for the service mentioned above. What is acceptable, does it make sense etc.? This doesn't belong in Market Discussion forum either, this is an option gathering exorcise.

Again, securing the insurance is NOT the goal at this time, we're asking for opinions based on the Tech III Strategic Cruiser, and what people would expect from an insurance policy.

EFSI SencneS
EVE Insurance

Morganta
Posted - 2011.07.01 16:54:00 - [6]
 

Edited by: Morganta on 01/07/2011 16:54:14
insurance in eve makes no sense.

it uses the real world model of depreciated value
in eve there is no depreciation of value with use, so you are just throwing money away insuring higher value ships

that loki costs half a bill for the hull, then another 50-100 mill to fit it out cheaply, up to a billion or more to do it full tilt boogie.

so on a good day you're looking at
500m
100m
170m
-----
770m with 90 days coverage
returns 350m (comon.. its CCP...)
you lose 420m

or

you lose 600m with no insurance
that's a difference of 180m isk

you save 5m insuring your ship Rolling Eyes

luZk
Amarr
Jaegerkorpset
Posted - 2011.07.01 17:11:00 - [7]
 

Do you cover monocles?

Enik3
Posted - 2011.07.01 17:34:00 - [8]
 

It's an interesting concept and a nice way around losing insurance if a ship is repackaged or contracted to your corp's JF pilot.

I think people will hesitate to spend nearly 50% of their ship's hull value on insurance though. I would suspect that a sweet spot would be in the ~30% range.

You could probably get away with ~50% to start if that cost were to adjust downward over time (i.e. when you determine the client is not losing ships constantly or at least not losing them in stupid ways).

Hexxx
Minmatar
Posted - 2011.07.01 18:16:00 - [9]
 

Edited by: Hexxx on 01/07/2011 18:18:05
Originally by: Morganta
Edited by: Morganta on 01/07/2011 16:54:14
insurance in eve makes no sense.

it uses the real world model of depreciated value
in eve there is no depreciation of value with use, so you are just throwing money away insuring higher value ships

that loki costs half a bill for the hull, then another 50-100 mill to fit it out cheaply, up to a billion or more to do it full tilt boogie.

so on a good day you're looking at
500m
100m
170m
-----
770m with 90 days coverage
returns 350m (comon.. its CCP...)
you lose 420m

or

you lose 600m with no insurance
that's a difference of 180m isk

you save 5m insuring your ship Rolling Eyes



In-game insurance for a hull (which is what you get default insurance on and what's insured in-game), is something like 10 million. We're pretty sure that the policy we outlined above produced a substantial benefit if you get blown up within the 90 day period.

No, it won't cover ALL your losses, but then, that's not the point. We view insurance as a hedge against loss to limit that loss.

edit: Reading it again, it sounds like maybe this is echoing an earlier point about premiums being too steep.

EFSI SencneS
Posted - 2011.07.01 18:16:00 - [10]
 

Originally by: Enik3
It's an interesting concept and a nice way around losing insurance if a ship is repackaged or contracted to your corp's JF pilot.

I think people will hesitate to spend nearly 50% of their ship's hull value on insurance though. I would suspect that a sweet spot would be in the ~30% range.

You could probably get away with ~50% to start if that cost were to adjust downward over time (i.e. when you determine the client is not losing ships constantly or at least not losing them in stupid ways).


That is part of the policy we're also trying to evaluate, we have lean on the side of caution here, we don't want to create an opportunity for people buying T3, and then getting blown up for profit.

It is likely that for some expensive ships the rate decreases rapidly for continued service.. Thank you for your constructive input.

If you have any other advice we're happy to hear it.

EFSI SencneS
EVE Insurance

Borun Tal
Minmatar
Space Pods Inc
Posted - 2011.07.01 18:21:00 - [11]
 

Originally by: EFSI SencneS
-- scam info deleted--
EFSI SencneS
EVE Insurance


You're nobody. Do you honestly expect anyone with any intelligence whatsoever to trust you with their ISK?

Only one person in this game I'd trust with my money in an insurance thing: Chribba. You, EFSI? Never heard of ya.

Scam elsewhere. Like Jita local, maybe...

Renan Ruivo
Hipernova
Vera Cruz Alliance
Posted - 2011.07.01 18:23:00 - [12]
 

Edited by: Renan Ruivo on 01/07/2011 18:24:32
Really, you should talk to chribba. Get him behind you (no pun intended)

Merasa Tro
Posted - 2011.07.01 18:25:00 - [13]
 

Taking inspiration from the UK car insurance industry, you should also do the following:

1) Excess. Each policy should have the following payout excess.
Pilot Excess : 50mil
Hull Excess : 100mil
Voluntary Excess : 20mil
Day of the Week Excess:

Making a claim on your policy will have the above excesses ducted from your pay out.

2) In the event of an accident if you didnt tell us that the hull was 'undocked' we wont pay out

3) Policy mileage, you may only travel up to and not included 10000km for the duration of the policy

4) We may sell your details to ambulance chasing lawyers so that you can sue the guy that caused the claim, pushing up everyones insurance costs

5) If youre under the age of 600years old the cost of the policy will increase to more than the value of the hull

6) If you make a claim for a mint condition pimp T3, we'll only pay out bottom book price for the value of the wreck

7) Phoning us to make a claim is a premium rate number, operated between the hours of 04:41 and 04:42

8) We also reserve the right to make any other weasel word exceptions to the policy so we dont have to pay at any time.

Hexxx
Minmatar
Posted - 2011.07.01 18:40:00 - [14]
 

Originally by: Borun Tal
Originally by: EFSI SencneS
-- scam info deleted--
EFSI SencneS
EVE Insurance


You're nobody. Do you honestly expect anyone with any intelligence whatsoever to trust you with their ISK?

Only one person in this game I'd trust with my money in an insurance thing: Chribba. You, EFSI? Never heard of ya.

Scam elsewhere. Like Jita local, maybe...


You really don't understand the phrase "We're not asking for you to buy anything" do you?Wink


Guys, I understand there is a HUGE trust issue we're side stepping here. It's not because we're pretending it doesn't exist (it does). What we're trying to do is come up with something that we THINK will work and that SEEMS to be priced right.

Right now, we can try to run numbers on some basic models but honestly we're concerned about pricing. That's why we posted in GD, to get some help on that piece. That's it. We're not asking for ISK. Do not send us ISK.

SencneS
Rebellion Against Big Irreversible Dinks
Posted - 2011.07.01 18:52:00 - [15]
 

Edited by: SencneS on 01/07/2011 18:52:36
Originally by: Borun Tal
Scam elsewhere. Like Jita local, maybe...


I'm not sure where in the entire thread we're asking for ISK. In fact we've actually stated we're not looking for ISK but opinions based on the policy we're proposing. Even if you trusted us as much as Chribba trusts himself you'd not be able to obtain a policy. The reason is we're not selling these policies so there is nothing to buy, and nothing to send ISK in to. Let me make it perfectly clear.. At this time we are not selling T3 policies, they do not exist, and we do not want any ISK for them.

If I could make it more clear I would but I have a feeling that, unless it literally kicked you in the balls, you'd still ignore it.

Originally by: Merasa Tro
1) Excess. Each policy should have the following payout excess.
Pilot Excess : 50mil
Hull Excess : 100mil
Voluntary Excess : 20mil
Day of the Week Excess:....


That is an interesting idea, you're suggesting that the ship should have a more defined or total coverage, but values get removed based on some key issues. That might actually work well for T3, because originally the market value is based off the lowest priced subsystems, however, if we price off the highest priced subsystems and deduct values for particular subsystems fit it would give a more realistic value, at least itemized.

Of cause if they are habitually losing ships they start to get less payout due to the pilot they are. That is a very interesting idea indeed. Thank you very much for that.

Edit - Posted with wrong character, but as if it really made a difference.

daveo911
Posted - 2011.07.01 19:47:00 - [16]
 

Quote:
4) You can cover multiple accounts and characters from a single policy. Meaning, if you have three characters that can fly the insured ship, the system takes the first killmail from all covered characters/accounts and issues a payment to that account. If you have multiple policies across multiple accounts and characters and you lose a fleet of insured ships the payment is issued one ship per policy.


Ok whats stopping me from buying a policy for a t3 ship then just advertising on the forums that i will split said policy with anyone who loses a ship in the next 90 days. they don't want to buy the policy because of cost or they dont think they will lose said ship but who wouldn't take 100mil to share a kill mail.

Whats if my corp has 100 t3 char. flying around... and we regularly lose at least 1 every 90 days. well the corp could buy the first policy 170m and then cash it in every 90 days, making the person requesting the payout amount (380m) give the corp another purchase amount (170m). Its more like an investment then, because i never lose any money.

The point is Insurance depends on some people never using it. if you sell insurance that always gets cashed in then you will go bankrupt.

Atreus Venom
Gallente
New Eden Hitmen
Posted - 2011.07.01 20:06:00 - [17]
 

and honestly 90 days in this game is a LONG time... real world insurance companies work because people arent going to battle in their cars.. and thats why they make money... you would constantly be losing money

Ein Phantom
Posted - 2011.07.01 20:16:00 - [18]
 

Originally by: Hexxx
we're trying to run another project (caveat - no Australians)



Racism isn't funny.

Meatbag Pussrocket
Posted - 2011.07.01 20:38:00 - [19]
 

i'll input:

this is actually more of a question than opinion though. Why not provide a tiered system where the payout is pegged to a percentage of the average market value?

so for example (these numbers are completely arbitrary)

Payin 30% Avg Market cost - Payout 75% market value
Payin 35% Avg Market cost - Payout 85% market value
Payin 40% Avg Market cost - Payout 90% market value

Player submits API, Value gets assessed, rate quote is emailed to player. reverse happens for ship loss.

This seems to me to be a fair and reasonable way to ensure that no one gets ripped off. the percentage values need to be tweaked i'm sure but Everyone understands the market fluctuates and floats around. why not the insurance market with it?




Patches Ohulahann
Posted - 2011.07.01 21:05:00 - [20]
 

Originally by: EFSI SencneS


This is exactly correct, we're not selling insurance, this is not a sales thread. This is a question thread about what would people pay for the service mentioned above. What is acceptable, does it make sense etc.? This doesn't belong in Market Discussion forum either, this is an option gathering exorcise.

EVE Insurance


Anyone who cant spell `exercise` and instead wants to perform an exorcism whilst dealing with insurance cannot be trusted with money.

Chevalleis
The Legendary Conquest
Posted - 2011.07.01 21:27:00 - [21]
 

Originally by: Borun Tal


You're nobody. Do you honestly expect anyone with any intelligence whatsoever to trust you with their ISK?

Only one person in this game I'd trust with my money in an insurance thing: Chribba. You, EFSI? Never heard of ya.

Scam elsewhere. Like Jita local, maybe...


Ha. Ha. Ha. You truly have no idea.

Valentina Valentia
Caldari
State War Academy
Posted - 2011.07.01 21:34:00 - [22]
 

I have 100% insurance... IT's CALLED my WALLET! but then that probably doesn't put any ISK in yours now does it? - scammer! and ANY insurance even in game is a SCAMM! Fly what you can afford to lose AND replace and keep your ISK in your wallet!

Morganta
Posted - 2011.07.01 21:40:00 - [23]
 

Originally by: Hexxx
Edited by: Hexxx on 01/07/2011 18:18:05
Originally by: Morganta
Edited by: Morganta on 01/07/2011 16:54:14
insurance in eve makes no sense.

it uses the real world model of depreciated value
in eve there is no depreciation of value with use, so you are just throwing money away insuring higher value ships

that loki costs half a bill for the hull, then another 50-100 mill to fit it out cheaply, up to a billion or more to do it full tilt boogie.

so on a good day you're looking at
500m
100m
170m
-----
770m with 90 days coverage
returns 350m (comon.. its CCP...)
you lose 420m

or

you lose 600m with no insurance
that's a difference of 180m isk

you save 5m insuring your ship Rolling Eyes



In-game insurance for a hull (which is what you get default insurance on and what's insured in-game), is something like 10 million. We're pretty sure that the policy we outlined above produced a substantial benefit if you get blown up within the 90 day period.

No, it won't cover ALL your losses, but then, that's not the point. We view insurance as a hedge against loss to limit that loss.

edit: Reading it again, it sounds like maybe this is echoing an earlier point about premiums being too steep.


that was your plan.

with what you outline the owner of a crap fit loki can expect to realize a 5million isk savings over not being insured at all.

5m isnt worth the risk of it being a scam, or even bothering in the first place, if you're hurting over 5m you probably shouldn't be flying T3s

Xercex II
Posted - 2011.07.02 01:15:00 - [24]
 

Edited by: Xercex II on 02/07/2011 01:20:13
Edited by: Xercex II on 02/07/2011 01:15:28
Leave aside the issue of trust in the following.

(1) The math previously present was wrong. For a 90 day period:
With EVE Insurance:
Cost of insurance: -170m
Value of lost hull: -500m
Insurance pays: 350m
------------------------------------
Net loss -320m

Without EVE Insurance:
Replacement value of hull: -500m
Default insurance pays: 20m
------------------------------------
Net loss -480m

Any fittings are not pertinent to the calculations because they are not covered in either case.

(2) It will be next to impossible to make a profit at this.
Insurance works on the basis of spreading the overall cost of losses across all the payers and it determines how it can do this based on actuarial tables that measure all kinds of things regarding how likely you are to have to use the insurance.
The cost to payout ratio you have set means that you will need to have 2.06 non-claimants per claimer per 90 days to break even. This doesn't seem like an unachievable number until you consider that (a) you (EVE Insurance) likely have no idea what the average lifespan of a T3 hull is. If T3s are destroyed too fast, you will have too many claimants per 90 days and you lose money. (b) You (EVE Insurance) are unlikely to know what the claim risk is for any given pilot asking for insurance. One bad pilot who loses 3 hulls in one 90 day period needs 6.18 non-claimants to break even. And finally (c), the more a risk-taker a pilot is, the more likely they will want the insurance. If I am a conservative player and can go 186 days without losing my T3, not unreasonable for a seasoned mission runner, then the cost of the insurance is not worth it to me. Meanwhile, if I am a heavy PvPer, insurance is a sure bet because my likelyhood of loss is substantially higher.

You can of course change the cost and payout amounts, but ultimately, what works against you is the lack of real cost for losing a ship and especially the lack of consequence to the person(s) responsible for the destruction of the ship. In the real world, insurance companies can go after whoever caused the car wreck, house fire, etc. and recoup some of their cost, but there is no such mechanism in EVE, so every loss against insurance is always an 100% loss to EVE Insurance.

I wish you luck at this but even given the disregard of trust issues from the start, I wouldn't invest in your business.

X

P.S. Now, pod/implant insurance may be something that *could* work, since pod loss is a lesser occurance due to not losing pods to NPCs and pilots being much more protective of their pods due to killmail bragging rights. I'm not sure the API gives you the tools to make such a business possible but it seems more likely to be able to be manageable.

Hexxx
Minmatar
Posted - 2011.07.02 02:03:00 - [25]
 

Originally by: Xercex II
Edited by: Xercex II on 02/07/2011 01:20:13
Edited by: Xercex II on 02/07/2011 01:15:28
Leave aside the issue of trust in the following.

(1) The math previously present was wrong. For a 90 day period:
With EVE Insurance:
Cost of insurance: -170m
Value of lost hull: -500m
Insurance pays: 350m
------------------------------------
Net loss -320m

Without EVE Insurance:
Replacement value of hull: -500m
Default insurance pays: 20m
------------------------------------
Net loss -480m

Any fittings are not pertinent to the calculations because they are not covered in either case.

(2) It will be next to impossible to make a profit at this.
Insurance works on the basis of spreading the overall cost of losses across all the payers and it determines how it can do this based on actuarial tables that measure all kinds of things regarding how likely you are to have to use the insurance.
The cost to payout ratio you have set means that you will need to have 2.06 non-claimants per claimer per 90 days to break even. This doesn't seem like an unachievable number until you consider that (a) you (EVE Insurance) likely have no idea what the average lifespan of a T3 hull is. If T3s are destroyed too fast, you will have too many claimants per 90 days and you lose money. (b) You (EVE Insurance) are unlikely to know what the claim risk is for any given pilot asking for insurance. One bad pilot who loses 3 hulls in one 90 day period needs 6.18 non-claimants to break even. And finally (c), the more a risk-taker a pilot is, the more likely they will want the insurance. If I am a conservative player and can go 186 days without losing my T3, not unreasonable for a seasoned mission runner, then the cost of the insurance is not worth it to me. Meanwhile, if I am a heavy PvPer, insurance is a sure bet because my likelyhood of loss is substantially higher.

You can of course change the cost and payout amounts, but ultimately, what works against you is the lack of real cost for losing a ship and especially the lack of consequence to the person(s) responsible for the destruction of the ship. In the real world, insurance companies can go after whoever caused the car wreck, house fire, etc. and recoup some of their cost, but there is no such mechanism in EVE, so every loss against insurance is always an 100% loss to EVE Insurance.

I wish you luck at this but even given the disregard of trust issues from the start, I wouldn't invest in your business.

X

P.S. Now, pod/implant insurance may be something that *could* work, since pod loss is a lesser occurance due to not losing pods to NPCs and pilots being much more protective of their pods due to killmail bragging rights. I'm not sure the API gives you the tools to make such a business possible but it seems more likely to be able to be manageable.


Quite right on a number of counts...we just don't know. Sencnes and I have enough money to underwrite the policies and I'm prepared to take a loss to get the data. Appreciate the feedback though and you're right...it's a risk for the underwrites. It could all be a wash if we're wrong on T3 being viable. I hope we're not obviously, but it's a distinct possibility.Neutral

Interesting note on the implants...it would be challenging to insure every single possible implant in the game, trying to track all the market prices would be tough.

Are there some particular implants that would be best to insure? A type or category? I'm just not that familiar with what's popular. =/

Naloth
Posted - 2011.07.02 02:32:00 - [26]
 

The idea has merit, though they are right, you'll need someone with credibility to back you.

However, I am merely here to educate someone.

Originally by: Ein Phantom
Originally by: Hexxx
we're trying to run another project (caveat - no Australians)



Racism isn't funny.


Australian isn't a race. The Indigenous Australians is a race and they make up less than three percent of the Australian population. Stop being self righteous and educate yourself.

Hexxx
Minmatar
Posted - 2011.07.02 02:35:00 - [27]
 

Originally by: Naloth
The idea has merit, though they are right, you'll need someone with credibility to back you.

However, I am merely here to educate someone.

Originally by: Ein Phantom
Originally by: Hexxx
we're trying to run another project (caveat - no Australians)



Racism isn't funny.


Australian isn't a race. The Indigenous Australians is a race and they make up less than three percent of the Australian population. Stop being self righteous and educate yourself.


Well, the guy that nuked the bank project that Sencnes and I worked on before was Australian, hence that remark. He was not indigenous either. Wink

Ein Phantom
Posted - 2011.07.02 03:01:00 - [28]
 

Edited by: Ein Phantom on 03/07/2011 05:37:36


 

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