One for All, All for One

Decentralized, autonomous, connected risk sharing communities

In 1906 Alfred Manes defined insurance as “an economic institution resting on the principle of mutuality, established for the purpose of supplying a fund, the need for which arises from a chance occurrence whose probability can be estimated." Today's insurance institutions, driven by solvency capital requirements and investor expectations are applying big data and behavioural surplus analysis to select risks, where the chance of occurrence is low and its probability is highly predictable. Customers with less predictable risks or higher exposure are faced with high premiums possibility to get cover at all. Let's be curious and think out of the box.

The basic idea of insurance has always been bringing people that are exposed to similar risks together in communities and share the risk in solidarity. In the beginning, risk communities were smaller, regional, created by communes or professional guilds. As risks got bigger, due to larger settlements and industrialization, larger risk capacity was needed and insurance corporations were created.

But what if...?

What if we would have had todays technology when those bigger risks started to appear? Would we still have created insurance corporations? Or could we have connected the smaller communities in a larger (global) network of communities that could carry larger events together? What if that risk community would be on a blockchain and connected to all the other communities as part of Super-DAO? And what if the money that people put in that community solution would not go away to an insurance company but instead, when not used to pay claims, could work for that community and would offer other decentralised finance (DeFi) services?

Glarus, 1861

When I am talking about purpose in insurance in Switzerland, people who know me know, I love to talk about the big fire in city of Glarus of 1861, which triggered the first major wave of national insurance company creations in Switzerland. The history books of those insurance companies usually start with that large event, where the regional risk community was not able to carry the costs of rebuilding. But did you know that this insurance company still exists? That it was established in 1811 after a citizens' assembly decision of 1798? For 50 years before the big fire the regional community was enough, served its members well and it is still around.


DAO stands for Decentralized Autonomous (sometimes also Automated) Organisation. A DAO is an organisation represented by rules encoded as a computer program that is transparent, controlled by the organisation members and not influenced by a central body, in other words they are member-owned communities without centralised leadership. A DAO's financial transaction record and program rules are maintained on a blockchain.

Source: Wikipedia

At the end of this page, I have summarised "The Basic Elements of Insurance" as I was taught them for my insurance training some 35 years ago.

With these basic elements you have all the building blocks needed to build a decentralised, autonomous risk sharing solution without a central insurance needed.

Imagine one small community coming together to share their risks. Now ask them to share a small percentage of their own reserves to help other communities just like them, in case a larger event happens to them. Think about how their ability to carry risk increases if they are together with ten other communities. A hundred. A thousand. One Million.

Am I a dreamer? Yes, I am ;). And there are more than 3 billion people on this planet without access to insurance today.

In Kenya, the country visited in February 2022 to learn about the lives and the communities of the people there and how they handle unexpected (and expected) large financial obstacles, 97% of the population do not have access to insurance. Micro-insurance solutions that try to close the gap struggle with premium collection and teaching people the benefits of thinking about future threats today.

«Control leads to compliance. Autonomy leads to engagement...»

Daniel H. Pink

Trust and Engagement in Small Communities

During my exploration of Kenya, I was introduced to Zainab Njoki and her organisation "Royal Focus". With her team she supports over 2.000 women organised in 'Chamas'. They help with their bookkeeping, administration and by coaching and mentoring the groups to continuously increase their financial literacy. The members, mostly women, tap into the power of community to build their lives and their businesses. Savings and loans are working well on this local level. The work Zainab is doing with her team shows, that it is just as much about financial education and relationships as about the members being able to make their monthly contribution.

An observation from my visit to "Winner Chama": I spent about two hours with the group. At first, when I observed the meeting and how each transaction was entered into a physical ledger, the daily meeting minutes and the member's individual booklet, I thought, this could be so much easier with an App. And then, the longer I watched, I saw the smiles and looks of pride when someone repaid her loan, the physical signatures given to receive a loan, the stories shared on what they had done or would do with the money. There is power in these human interactions, these rituals and any digital solution needs to make sure that the human side of the community is not lost.

What's Next?

I am currently working on two ends. One is to model and test the viability for individual communities and the network effect in a mathematical model. The other is to develop different designs for community setups using behavioural theory and create an experiment for Autumn 2022 (after the presidential elections) to test those setups in a controlled experiment in Kenya.

If you are an actuary or a design thinker who would like to have social impact, contact me!

TOP THREE Financial Challenges in kenya For MANY KENYANS

One of my regular questions, when talking to people and Chamas was: What are the moments, when you have to reach out to family, friends and neighbours for money or get a loan, when you do not have enough savings? The top three answers:

1. School fees for the children

2. Unexpected medical expenses

3. Burial costs

Another kind of savings and loan community I encountered are 'SACCOs'. They are larger, "not-for-profit"-organisations usually initially created by professional organisations. In Kenya the three largest Saccos are Teacher (Walimu), Electricity (Stima) and Police (Polisi). After new regulation in Kenya, the Saccos were allowed to open up membership. Today, for example in Stima Sacco, two thirds of the members are from outside the electricity industry. You can either buy cooperative shares for dividends or make deposits into your account for interest. The money you deposit is locked in until you leave the Sacco.

After between 3 to 12 months of membership (it differs from one cooperative to another), you can apply for a loan, usually at a low interest rate (for Kenya) of around 7% p.a. and usually a multiple of 3 to 5 of the amount you have already deposited. In many cases, to get a loan, you also have to provide 3 to 5 guarantors that are are liable for the loan with you.

You CAn also get a loan in kenya, it's easy...

With the M-PESA from SafariCom (or similar products from the other mobile phone service providers), the 'unbanked' can get access to digital money transfers, paying in shops (Lipa na M-PESA), pay bills or buy airtime. Everything for a small %-fee.

You can also get short term loans from two cooperating banks. One bank offers a 30-day loan at 9% for the period (that's 108% p.a.). The other bank offers a 30-day loan at 8.64% for the period (that's 103.68% p.a.). If you do not pay back your loan at the end of the 30 days, your M-PESA services are locked until the credit is reimbursed.

The Basic Elements of Insurance


The coverage of future needs requires mutuality. A large number of threatened people must come together to share the risk. The ethical value of insurance is "One for all, all for one." The lucky person, who is spared from harm contributes for those who are less fortunate.


The coverage of future needs requires planning and continuity. Coverage for just one event does not qualify as insurance. Furthermore it requires the organisation of the risk communities where each member has legal claim when the insured risk occurs. And finally, there needs to be equality of contribution and benefit in return. In other words, insurance cannot be free.


The objective of insurance is to cover a need that is created by the occurrence of a dreaded event. The goal is to replace the damage, it cannot go further. Insurance cannot lead to the enrichment of the person concerned.


The occurrence of the feared event must be accidental. Its occurrence must be beyond the control of the insured person and independent of his / her will.

Estimability of Probability

Insurance is based of statistics. Mainly statistics for claims frequencies and claims amounts are of interest. Probability calculations are used to project past statistics into the future and thus calculate future premium and reserve requirements.

Similar Threats

To have insurance in the true sense, everyone in the risk community must be exposed to the same threats. The occurrence of the insured event must create a similar need.

If this topic moves you as well, then don't hesitate to contact me to find out, how we can learn and make progress together.

Picture Sources: & Angela Matthes