Leading German peer-to-peer insurance broker Friendsurance is moving nearer to opening in Australia in 2017.
Friendsurance Australia will be based in Melbourne and is already recruiting an insurance team.
Friendsurance plans to extend its operations to Australia through a license agreement with Friendsurance Australia, the local company with the main investor being Ellerston Ventures, the venture capital arm of Ellerston Capital. Ellerston Ventures invests in disruptive companies with innovative products, and most recent investments are in online market place companies.
Friendsurance Australia believes that because Australian customers are looking for new and different insurance options, such as the cash-back incentive.
Friendsurance will enable customers to share risk by forming groups and pooling their insurance premiums to cover smaller claims. Customers can also receive up to 40% of their premiums annually if they maximise their group size and make no claims.
Ian Youngman, author of the new market research report Peer-to-Peer Insurance, comments; "Friendsurance are unusual as they are a broker rather than an underwriter. So they will have to convince existing Australian auto companies to do business. The best thing about being a broker is that it will be much easier to get regulatory acceptance as Australian regulators may struggle to allow a peer to peer insurer to open there."