Revisiting How the Mutual Protection Model Differs from the Modern Insurance Industry and What It Means

The modern insurance industry (including mutual insurance companies) is in essence a fund, a huge pool of capital. This came about because it rests on two assumptions and one objectively insurmountable difficulty. The two assumptions are:

1. The public cannot manage its own money (so it is better to hand it to us, the insurance company);

2. People are wicked and dishonest (so I charge in advance, lest you fail to pay later).

Together with a hard-to-overcome technical shortcoming, these two assumptions seemed reasonable: before the internet existed, there was no technical means to notify policyholders and no way to collect payment afterward, and the costs were high.

Thus the model of collecting money first and providing protection afterward took shape.

Of course, this is not necessarily wrong. Some insurance companies may indeed have strong investment capabilities and manage money more effectively than individuals, and they can promise guaranteed payouts under certain preconditions.

But the costs it brings are considerable: sales costs, operating costs, management costs, and regulatory costs are all enormous. During the U.S. subprime crisis, for example, the American government had to spend public funds to rescue large insurers. That is why governments everywhere guard against the various risks of insurance companies and regulate them strictly.

But now that the internet exists and is increasingly developed, has the situation changed? The prospect of eliminating this capital pool (fund) seems to be in sight:

Since the internet's costs are so low, notifying afterward and paying afterward both follow naturally, and most of the reason for requiring people to pay in advance disappears.

It thus becomes possible to form a model different from modern insurance.

It too rests on several assumptions:

1. The public can manage its own money;

2. Whether people are good or bad, when it comes time to pay afterward, the vast majority will stay;

3. Technology can solve the problem of low-cost notification and payment.

4. As long as enough people keep participating in cost-sharing, long-term payout capacity can be formed. And the internet provides the technical ability to gather enough people at low cost.

Anti-Cancer Commune firmly believes in the above and seeks to build exactly such a model. Precisely for this reason, the mutual protection model differs from the modern insurance industry, and that is why we call it a new model.

Looking at the current situation, it works. In the long run, many difficulties remain to be overcome, but no one can dismiss us in advance.

The above is my understanding of how the mutual protection model differs from the modern insurance industry; from it one can glimpse its great significance, even if for now it is only symbolic.