Fida, AdaLife: Onchain life insurance

[GENERAL] Name and surname of main applicant

Rodolfo Hansen

[GENERAL] Are you delivering this project as an individual or as an entity (whether formally incorporated or not)

Entity (Not Incorporated)

[GENERAL] Please specify how many months you expect your project to last (from 2-12 months)

10

[GENERAL] Please indicate if your proposal has been auto-translated into English from another language

No

[GENERAL] Summarize your solution to the problem (200-character limit including spaces)

We will explore what a fully on-chain life insurance product will look like, from proof of life to proof of death. Insureds will have seamless transactions and a few clicks to get a simple life cover

[GENERAL] Does your project have any dependencies on other organizations, technical or otherwise?

No

[GENERAL] If YES, please describe what the dependency is and why you believe it is essential for your project’s delivery. If NO, please write “No dependencies.”

No dependencies.

[GENERAL] Will your project’s output/s be fully open source?

Yes

[GENERAL] Please provide here more information on the open source status of your project outputs

With regards to the specific life insurance product research; we will not be able to share some of the content from the research. As the results come out, and a potential product is released, we will gradually start releasing anonymised data.

All changes to our on chain contracts will however be open sourced for peer review and security. Additionally, the life insurance product once launched will have all the necessary outcomes publicly reviewable.

[METADATA] Horizons

Financial Services

[SOLUTION] Please describe your proposed solution

We will develop the necessary work and formulas to implement a successful life insurance product as an extension to our risk transfer engine.

It will be a mixer merging individual policies together before they get re-distributed and fractionalized. We will simulate various mechanisms of mixing with tradeoffs on activation and smart contract complexity.

The end result will be a feasible life insurance product people can sign up for, declaring a reward address to receive a payout after saving for a period of time or in case of untimely death.

With life insurance in specific getting the mileage and the limelight in the recent years, this solution will be the most sought after across the globe.

[IMPACT] Please define the positive impact your project will have on the wider Cardano community

The gap of Life Insurance across the world is between 32% to 75% across US and Europe.

Across Asia and MEA the average gap is actually 95%. The total population is a 3.2 billion.

Even if 10% this population is in the digital world - we are speaking of 318 million people to cover. Given the mortality rate of 1 - 4 per thousand globally we are looking at creating history with a possibility of penetration that hasn’t been ever done

Integrating Insurance Tech into the Cardano Ecosystem aligns with Cardano's core values of sustainability, transparency, and inclusivity.

By supporting this proposal, Cardano can demonstrate its commitment to leveraging blockchain technology to address pressing global challenges. Furthermore, this endeavor aligns with the United Nations Sustainable Development Goal 10, which calls for reduced inequality. By bringing insurance solutions to under-served populations and enabling participation from diverse stakeholders, Cardano can contribute significantly to achieving this goal and solidify its position as a leader in driving positive social impact.

A novel life insurance product is an excellent proof of Cardano's worth.

[CAPABILITY & FEASIBILITY] What is your capability to deliver your project with high levels of trust and accountability? How do you intend to validate if your approach is feasible?

We've already built the core tech of the Fida platform as we have shown in our CLI and the web interface for the risk transfer marketplace during the Cardano Summit.

Priya has over 24 years building life insurance companies with novel products and bring them to fruition around the world. Together with Motaz we have all the necessary connections within the insurance industry to deliver a valuable product for the Cardano Community and the rest of the world.

[PROJECT MILESTONES] What are the key milestones you need to achieve in order to complete your project successfully?

Milestone Output:

An insurance model determining minimal rates and numbers of participants needed for the system to be revenue positive.

Acceptance Criteria:

The model is able to work through a variety of signup and death rates to model appropriate loss ratios.

Evidence of Completion:

The model is expressed as an excel sheet holding the tabled values and formulas.

Milestone Output:

The smart contract code needed to mix individual policies and a mechanism for fluid or periodic activation of the same.

Acceptance Criteria:

Smart contracts written mixing multiple policies into a treaty.

Evidence of Completion:

Smart contract code in our public github repo.

Milestone Output:

GenWealth will introduce the KYC aspect as well as integrate the opt-in option to include AdaLife policies within their Wealth Transfer System.

Acceptance Criteria:

A documented KYC process for the Insured, and upon claiming of the policy.

Evidence of Completion:

A document explaining the process of who and how the KYC will be performed in a selected jurisdiction.

Milestone Output:

A full report of the viability and methodology for KYC and death certificate validation along with the plans for rolling out a potential product.

Acceptance Criteria:

A documented process start to finish for the operation of applying and receiving life insurance on Cardano, with said insurance payout ultimately claimed by a beneficiary.

Evidence of Completion:

A document explaining the process of who and how the KYC will be performed in a selected jurisdiction.

[RESOURCES] Who is in the project team and what are their roles?

Rodolfo Hansen: Fida CEO and project facilitator

Slawomir Sledz: Fida CTO and smart contract author

Motaz Bukhari: Insurance Industry Liazon

Priya Krishnamoorthy: Project Lead and Lead Underwriter

[BUDGET & COSTS] Please provide a cost breakdown of the proposed work and resources

Policy research and development, including:

rates, estimates, underwriting and policy write-up: $12,000 USD

Proof of Life and Proof of Death mechanism R&D and survey data acquisition on which regions would make sense to start in, given the degree of automation, trust and coincidence with potential users. $6000 USD

Smart Contract Development: $16,000 USD

Total: $34,000 USD

[VALUE FOR MONEY] How does the cost of the project represent value for money for the Cardano ecosystem?

The cost of the project represents value for money for the Cardano ecosystem in several ways:

1. Potential Impact: By bringing a working life insurance product to the Cardano Ecosystem the project has the potential to unlock significant value and opportunities. Insurance technology can provide greater financial inclusivity, risk mitigation, and economic stability, aligning with the goals of reducing inequality. The long-term benefits and positive impact of this integration will far outweigh the initial costs.
2. Market Potential: The insurance industry is a multi-trillion-dollar market globally. By leveraging the Cardano Ecosystem to introduce Insurance Tech, life insurance is a first step in an opportunity to tap into this market and create new revenue streams. The costs associated with the project are justified by the potential market growth, attracting new participants, and expanding the ecosystem's reach.
3. The insurance gap is huge across the globe: 32-42% across USA to Europe and anything between 92-98% across Asia / Africa and the MEA. We start with the digital community- who even if 10% of the population - will be an approx 318-320Million people. Long term products give returns compounded which will outweigh the costs.
4. Future Returns: While the upfront costs may seem significant, they are an investment in the future growth and development of the Cardano ecosystem. The integration of Insurance Tech can attract new users, increase transaction volumes, and enhance the overall ecosystem's productivity and value. The long-term returns and benefits generated by this project can far exceed the initial expenditure. Also with the insurance world looking at the digital expansion - Cardano Community will have the first to hold the first TRUE digital ecosystem for life insurance with policies and laws specific to the digital community.