The multi-trillion-dollar insurance industry is dominated by huge corporations, saturated with global institutions, constrained by heavy regulations and plagued by misalignments of company and consumer incentives. The insurance world has devolved into an inefficient, expensive, and ultimately frustrating industry. When customers most need help, they can end up fighting in vain for reimbursement from companies whose profits depend on them not paying out.
Insurance industries can’t provide coverage for many markets… they can’t pivot. If you have ever read an insurance policy, or tried to file a claim, you are probably aware of the hidden complexities with traditional insurance. Or, you’ve found out that the insurance you purchased doesn’t protect you against the risks that you thought were covered, or you may not have met your deductible. These are the gaps in insurance that cause financial impairment.
Most insurance is based on historical data that actuaries use to determine the “price” of coverage so that the insurance company will maintain their profits. In 2009, two events occurred that have proven the inability of the insurance industry to adapt to emerging risks. It’s now 2021 and the industry is still trying to understand the risks of UBER and bitcoin, let alone DeFi and that is the reason a Decentralized Risk Protocol is paramount for the health of the entire ecosystem. Pharo allows consumers to identify and manage emerging risks through unique mitigation approaches, using digital assets as a hedge against potential losses.
Pharo is building a protocol for decentralized risk management products and applications. Individuals, businesses, large and small, nonprofits, and fintech and insurtech startups can all come together to provide better products and services. We aim to use blockchain technology to help make the sale and purchase of risk more efficient, enable lower operational costs, and provide transparency into the industry. Blockchain can provide the means to disintermediate the market with a peer-to-peer risk platform that helps us act as society's safety net. We envision new individuals building their own markets and products on top of the Pharo protocol.
2. How it Works