ShineChain intended to be a global mutual insurance community that is powered by the blockchain. It intends to solve some of the issues that currently plague the insurance industry globally.
Some Of The Issues Plaguing The Insurance Sector
Most people often ignore the ubiquitous risks that come with personal accidents. For instance, the number of airline passengers in the world had reached 4 billion by 2016. However, the amount of aviation insurance premium in the world was only $1.2 billion. This equates to about only USD 0.3 per passenger. That means that less than 10% of passengers can benefit from insurance.
The incidence of critical illnesses such as cancer is rising daily to increased damage to the environment, food safety issues, and unhealthy life choices.
Commercial insurers charge high premiums and the operating risks are quite high. This is due to poor fund management by some insurers and the high sales commissions charged.
Lack of transparency
Centralized mutual insurance communities in their current form have little or no transparency. That means the members have little understanding of their operations, which leads to a lack of trust. This is because they are unable to prove themselves open and fair. Thus, it becomes difficult for users to establish a relationship of trust with them.
Fraud in the insurance sector has become quite common. This is a common problem in all centralized insurance companies.
In a central organization, the risk of security leaks is always present. The reason for this is that the hacker only has to find one weakness in the system. Even the most secure systems always have a slight weakness.
The Solution ShineChain Offers
The blockchain makes various features possible such as openness and transparency, a consensus mechanism, and high security. With the blockchain, digital tokens can be issued, and high-security smart contracts can be issued at any time.
Beneficial To The Public
Mutual insurance comes with a low entry threshold. For instance, an airline, maritime or train accident mutual insurance on USDT 150,000 only requires 5 USDT SHE (ShineCoin) when users want to sign up to the community. If no member of the community experiences an accident, the SHE tokens will remain in a user’s account.
Besides that, insurance liability will remain valid until the balance of the SHE account is insufficient. In such an instance, the user has the option to top up their account or quit the community altogether.
Transparency And Openness
All those in the community can check the digital assets in the communal insurance account that is stored on the blockchain. This level of transparency and openness helps to create trust within the community.
A Reward And Punishment Mechanism
The community will do the picking of assessment managers in an open manner. There will be a reward mechanism for reporting dishonesty. Besides that, there will be a punishment mechanism for those that break the rules.