After “De-Financialization”: Online Mutual Aid as the Simplest Form of Risk-Sharing Between People

Insurance today is no longer simply “everyone sharing risk together.”

With the development of the modern financial system, insurance has gradually become a highly financialized product: premiums are collected first, forming a vast pool of capital, which is then supported by actuarial calculation, reserves and investment operations to underwrite future payouts. Such a system has its efficiency and its value, but it has also become increasingly complex. For ordinary people, what we buy is no longer simply a risk guarantee, but a set of financial products that are genuinely hard to understand.

Online mutual aid takes a different road.

It strips away most of those financial features: it does not accumulate huge sums in advance, does not rely on investment returns, and does not support its protection through long-term capital operations. Instead, once a risk actually occurs, the participants share the cost together.

Put simply: when someone meets with misfortune, everyone chips in to help; when no risk occurs, no such money is collected or managed at all.

There are, of course, gains and losses in doing so.

Removing the capital pool and investment operations means giving up financial leverage, long-term investment returns and the mature capital-buffer mechanisms of commercial insurance; but on the other hand, it also reduces the complexity and risk that come with idle funds, investment management and capital operations.

So, leaving aside for the moment the question of whether online mutual aid or commercial insurance is better, perhaps we can understand it from another angle:

Online mutual aid is, in essence, a “de-financialization” of risk protection.

It tries to peel away layer after layer of complex financial structure, until only the simplest thing remains — a group of people facing similar risks, bearing the loss together when misfortune strikes one of them.

In that sense, it is in some ways close to what insurance looked like at the very beginning.

Insurance has developed for hundreds of years, becoming ever more professional and ever more financialized; online mutual aid, by contrast, seems to ask a very simple question in the opposite direction:

If you take away capital, investment and complex financial design, can the simplest form of risk-sharing between people still hold?