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What is Aigang?(2)
Aigang is a blockchain protocol for digital insurance, meaning, a “smart” insurance processs through the policy, pricing and claims processes. Aigang is aiming to create what they call an “Insurance DAO”. The platform runs via an easy-to-use mobile application and even offers unique insurance policies for items like the battery in a smartphone. In traditional insurance, you have one person or company who is the “insurer” and the other party who is/are the “insured.” Each party agrees to a policy that incorporates pricing based on a variety of factors contextual to the insurance category, and as claims are filed by the insured, the insurer will generally act in their best interest to remedy the situation. Aigang’s goal is to make this policy, pricing and claims process easier and faster using software algorithms instead of person-to-person interaction. They believe their insurance DAO structure will help eliminate fraud, high costs, and speed up the insurance process.
“Pre-Launch” Contribution Period
The pre-sale begins on July 25, 2017 and ends August 25, 2017. Smart contracts for contribution can be viewed here.
There is a token bonus of 25% during the pre-sale period and a hard cap of 46,093 Ether. There is a minimum contribution amount of 10 Ether at a price of 1 Ether for 1 APT (Aigang Prelaunch Token).
In order to participate in the pre-launch contribution, you must download the Aigang app and create an account. The app functions on smartphones and tablets. In order to contribute from a desktop, you must complete the process and open up the contribution link from an email sent to the email provided during the sign-up process. An Ethereum contract address will be available at the end of the process that accepts Metamask and Parity extensions, or can be pasted into an ERC-20 compatible wallet.
The Aigang team estimates that the ICO will begin in early October and a specific date will be announced in September. The ICO should last one week, according to the team, and the token will be called AIX, not APT.
The following information is taken from the Aigang whitepaper:
Augustas Staras, Business development
Augustas has 10+ years experience in creating, growing and managing online and consumer businesses. He works in the emerging digital finance industry and has co-founded a peer-to-peer lending and investment platform with 15,000+ users. He also works with blockchain projects, helping them achieve fundraising objectives.
Aidas Ignatavicius, Chief Actuary
Aidas has over 10 years experience working as an actuary for a leading insurance company in Europe. His responsibilities include designing, validating and testing various pricing models for insurance products and policies. He has an master’s degree in mathematics and is working towards becoming a fully accredited actuary at the Institute and Faculty of Actuaries, UK.
Reda Markeviciute, Insurance Product & Policy Manager
Reda has more than 10 years experience in various finance, digital and marketplace businesses. She previously worked as a product manager and an actuary at SEB Life Insurance, one of the biggest insurance companies in Scandinavia and the Baltics. She has experience in product management, fundraising and business development.
Jonas Matkevicius, Marketing Manager
Jonas is an inbound marketer with a deep passion for process automation. He is experienced in SEO, content marketing, inbound lead generation and has strong startup experience. He has a bachelor’s degree in international business and worked as a marketing manager at a sales consultancy startup.
Darius Devenas, Full Stack Developer
Darius has over eight years experience in enterprise software solutions. He works as a senior software engineer for Adform, a reporting platform for media agencies, trading desks and advertisers. Darius builds reliable platforms for critical business processes and is responsible for Aigang’s security.
Mindaugas is a software developer with a huge passion for iOS architecture. He has a degree in computer software engineering and previous application experience, as well as experience working on grand scale projects and establishing point of sale systems.
Naglis is a co-founder of ItWorks Mobile, a mobile applications and design company. He has previously built secure and intuitive Android applications for banks, festivals and other business projects. He has a bachelor’s degree in computer software engineering.
Further information, including allocation of tokens between crowdsale members and team members, lockout period for team members, price of crowdsale AIX token, utility/value of AIX token and more will be published in September by the Aigang team. You can subscribe for more updates at the bottom of their website.
Conventional insurance policies incorporate two main components in their policies:
- Standard Wording: This is the wording of the policy, and is the same for all policy holders. This describes the rules, rights, and obligations of both the insured and insurer.
- Schedule: This includes further details that vary by policy like total amount insured, property being insured and the payment schedule.
The smart policy would include the same things, but with a third component: smart algorithms that are completing the operations associated with the Aigang insurance plans.
Conventional insurance pricing generally involves the following three components:
— Assessing whether the risk can be accepted
— Setting the conditions
— Setting the premium
In the beginning, Aigang will need access to data from external sources to determine pricing accurately. Once enough policies are created, the necessary algorithms will be able to do this independently of outside sources.
Pricing is generally broken down between a risk premium and an office premium. Risk premium is the actual cost of claims, which is unknown at the time of policy creation, and thus must be estimated. Office premium is the risk premium plus loadings for expenses (re: expenses for the insurer to work with the insured). These expenses include administration costs, claim handling costs, reinsurance costs and more. Both the risk and office premium are combined to show what the actual premium is. Aigang details their equations to determine both in their whitepaper.
Conventional claims include the following five components, and would be affected by an insurance DAO in the following ways:
- Claim Event
This is the actual occurrence of the claim event (accident, etc.) that must be recorded by the insurer. Traditional insurance policies require the insured to record claim event information, but using the insurance DAO it would be possible to automate this event detection process. For example, if an autonomous vehicle were to have a crash the claim reporting process could be autonomous as well, automatically reporting the incident to the blockchain.
It is the insured’s responsibility to report the claim event to the insurer in a timely manner, but unfortunately for both parties this does not always happen. Using the insurance DAO, notification would be instantaneous for the cases where the claim event is detected automatically as detailed above.
This involves verification of the claim’s validity as well as necessary details required to determine the claim amount. In traditional insurance, this stage relies heavily on individuals, and so often presents opportunities for unfair subjectivity in court or otherwise. If the claims can be validated automatically by the software within an affected IoT device, the settlement could be fully objective and autonomous when using the insurance DAO.
This point of the claims process can be either actual payment or replacement of the damaged item. In an insurance DAO, the software code could make the money transfer or trigger the repair process automatically.
Sometimes, new information comes to light, which requires an adjustment to the settled claim. Re-opening of a claim is generally complicated and time-consuming, so in the case of the insurance DAO, the Aigang team believes the process should be optimized in such a way that any reopening is not possible or such claims are instead ceded to a reinsurer.
How does it work?(2)
Insurance is possible because there are more premium payments coming in than there are funds for claims going out of the insurance company. It’s vital that the insurance DAO be able to bring in enough premiums to more than cover the funds for claims going out. Aigang aims to solve this problem using a peer-to-peer insurance policy system. Investors willing to take on risk from policy holders will earn profits from paid premium leftovers. Policy holders pay the premium and deplete the premium reserves as claims are filed. Look at the following P&L example from Aigang that incorporates a pool of investors and policyholders:
Invested Amount: This comes from the investors taking on the policy holders’ (the insured) risk. Investors will be required to pay some percentage of the premiums in order to create a buffer for the reserves used for claims.
Premiums paid by policyholders: This is the total that the pool of insured individuals pays the insurer in return for the insurance.
Claims during half year: The amount paid out by the insurer for claims that occur during 6 out of 12 months of the year.
Expenses during half year: These are the associated expenses for the insurer to cover the insured for 6 out of 12 months of the year.
Funds Returned to Investors: Under the Aigang investor structure, the investors that cover the policy will be rewarded proportionally with premiums that were not used. The final total returned can be seen at the bottom of the spreadsheet.
This investor process will be completed through the use of Aigang tokens in some form. The tokens will also be traded on secondary markets.
The following roadmap can be found in the Aigang whitepaper:
Ethereum blockchain smart contracts for policy issuing, risk assessment, claim processing. User interface for the insured to manage all insured devices. Smart device tracking software use case development for issuing claims automatically.
The associated Blockchain environment includes the Ethereum testnet. Demo apps are complete and can be downloaded here.
Update Ethereum smart contracts for profit calculations, reserve formation and tokenization. User interface for the investor to manage portfolio of investments and invest into insurance product pools. Backend infrastructure for off-chain data collection and calculation. The associated Blockchain environment includes the Ethereum testnet. Early alpha can be accessed here.
Beta version released. Release of several developed insurance products. Opening beta version of the platform for investors and people to insure. Reinsurers integration. The associated Blockchain environment includes the Ethereum mainnet.
Stable and functioning software for several insurance products. Opening platform for module developers and introducing new insurance products. The associated Blockchain environment is “TBA.”
Release v2.0. Fully automated Insurance Protocol with insurance products (modules) for people to insure and investors to fund. The associated Blockchain environment is “TBA.”
View the Aigang Website here.
View the only comprehensive list of active and upcoming ICOs here.
Disclaimer: This report is intended to provide market intelligence. This is not investment advice and does not constitute any solicitation or endorsement of any investment. Any investment you make is done at your own risk and at your full and absolute discretion. The contents of this report are the property of ICO Alert. All rights reserved.
(1) Aigang Slack, Slack Application, (2017)
(2) Aigang Whitepaper, Aigang, (2017)
It is important to note that the Aigang whitepaper is their v0.2, and does not include full detailed information on the project. Specifically details on the ICO scheduled for October are not included in the current version.