Decentralized Event-Risk Contracts

BACKGROUND:
At its core insurance is not much different than a prediction market (ie: sites which allow you to bet on the outcome of an election). My idea is to create an insurance marketplace where anyone can seek to hedge their risk, or take on risk and potential yield via premiums, while eliminating claim verification from the process. Think of how much time and money is wasted by insurance companies in verifying claims. Under this alternative business model insurers do not have this expense as they are not insuring against outcomes (IE: property damage) but inputs (IE: hurricanes). people do not take out insurance for damages, but insurance against events happening. Not all insurances could be run in this manner, indeed from talking to some contacts in the industry, the initial application may be more interesting as a re-insurance (insurance for companies offering home insurance/etc) as a way to spread risk of a catastrophic general event outside the industry to a more general populace.
Scenario 1:
Existing:
I insure my house in southern Florida for damages up to $300,000, the fair market value price of the house. Preliminary research suggests such a policy would cost between $6,000 to $16,000 per year (depending on mitigation improvements/etc)
Proposed:
I seek out insurance against a Category 4 or higher hurricane being present at 24.564713,-81.8154764 for more than 2 hours, during 2021. If this condition occurs, I seek $300,000. I can set a maximum price I am willing to pay for this coverage and leave it open for insurers to bid against.
Scenario 2:
A multinational insurer has hundreds of millions of dollars of potential claims if a major earthquake hits southwestern Japan. Rather than ceding on these liabilities to a reinsurer (an insurance company for insurance companies), they float a contract on our platform and hundreds of thousands of individuals can take on pieces of this risk.
It is conceivable that initially such contracts would not satisfy the legal requirements of mandatory insurance for any jurisdiction, thus it is likely that users of this service would still seek out minimum legal insurance coverage in line with their local jurisdictional requirements and only seek out coverage for any extra potential liabilities they wish to cover.
Initially, the marketplace would only offer contracts against events which occured on-chain: IE: velocity of ADA transactions on chain (total amount of ADA moved / total supply of ADA). Interestingly, with stable-coins coming to Cardano, it seems likely that one could infer the USD/fiat value of ADA and potentially offer insurance for/against the appreciation/depreciation of ADA - essentially offering a decentralized leveraged long/short position without any centralized exchange.
Additionally, due to the ease of entering into such arrangements, it's conceivable that the coverage periods could be drastically shorter than a typical annual insurance contract: only covering a specific quarter, week, day or second. This could prove valuable as in the current idea it is imagined that the seekers premium and the insurers collateral would be held in escrow by a smart contract in order to prevent counterparty risk in a decentralized trustless system.
IMPLEMENTATION:
This proposal is to cover the cost of contracting a world class team which has worked with IOHK on the Cardano codebase. Along with two of my former software dev colleagues, together we would conceptualize, model and develop a set of rigorous smart contracts that more completely flesh out the ideas proposed above and in the video down below.
Additionally, I am talking to another friend as a potential investor, were we to secure the Catalyst funds, that would greatly aid me in my pitch to secure further funding through that avenue.
Once the above Proof of Concept is completed, we would have a better idea of the exact nuances and features of each of the contracts, and would go on to build an appropriate webapp. It would act as an interface providing the basic marketplace functions between providers and takers of risk described above, and then interact with a Cardano-node to create smart-contracts which provide the functionality described above.
METRICS:
Aggregation and summary of total number and value of contracts entered into on the site, including payouts that occurred due to events transpiring while being covered by risk contracts.

VIDEO OVERVIEW:

https://www.youtube.com/watch?v=A2nD6F-KlzE