Social Proofing Explained
Volk explained how social proofing would work in auto insurance, which is the first product the company will offer with partner insurers in the U.K. To illustrate the concept, he described a responsible driver named John who pays $1,000 every year for his car insurance, despite the fact that he has not had any at-fault accidents in years.
On the other hand, InsurePal could provide John with a much better deal, reducing his premium by $400, as long as he can get a friend or family member—an endorser—to vouch for his good driving record.
When John gets his friend Mary to be his endorser, she immediately receives an upfront reward of $100 worth of InsurePal tokens (IPL tokens), which can be instantly sold for cash on the token exchange where IPL is listed or invested in InsurePal services. The InsurePal website describes the IPL token as “the fuel of InsurePal platform, used by clients and third parties worldwide.” (See below for more detail on IPL tokens.)
In this model, Mary gets an immediate bonus while John ends up with a cheaper premium. For her participation in the deal, Mary must assume limited financial responsibility for a third-party deductible—in this case $550—if John files an at-fault claim.
“We want to partner with traditional insurance companies and provide them with a tool to do a better risk selection with our innovation: the social proof.”
Tom Volk, InsurePal
The insurer, using the InsurePal platform, will only deduct the $550 from Mary’s credit card if there is an at-fault claim. “To be John’s endorser, Mary has to be pretty sure that she is endorsing a diligent and responsible person, otherwise she will be losing money,” said Volk.
Volk noted that this third-party deductible is similar to a co-signed loan in banking, when parents co-sign loans for their children. With the InsurePal concept, however, the co-signee is only exposed to the limit of the deductible, rather than the full amount of the insurance liability.
Volk explained that the $550 charge is calculated from the $400 that John saved, Mary’s $100 worth of IPL tokens and a $50 penalty. The excess above that amount is covered by the insurer, Volk continued.
How is the premium determined? InsurePal will, based on the pricelist submitted by the insurer, do a classical calculation of the price quotation, just as insurance companies do every day for traditional motor insurance. “Then, we undercut the price with the social proof,” Volk said.
If John can get two people to vouch for him, he will save even more money on his annual auto premiums because he is more trustworthy than someone else who has no endorsers, said Volk.
“If your friends trust you, we trust you,” he said, repeating one of InsurePal’s catch phrases, used in its marketing.
Further, Mary and John can adjust the amount of the deductible. “Mary can say, ‘Yes, I trust John, but I don’t want to take a $550 exposure; I’ll take a $100 exposure instead,” which Volk explained would reduce John’s premium discount and Mary’s reward in IPL tokens.
In addition to allowing John to find more endorsers to further cut his insurance premium, InsurePal also will accept mutual endorsers, or couples. Mary and John can mutually endorse each other, as an example. The policy due dates don’t need to overlap, Peterman explained.
While InsurePal’s initial focus is on at-fault jurisdictions across the globe, Peterman explained that social proofing still would be effective at reducing premiums in no-fault jurisdictions such as those in 12 U.S. states, but with a smaller overall effect. However, by helping with underwriting and risk assessment, social proofing would help insurers offer a slightly better rate to drivers, he explained.
https://www.carriermanagement.com/features/2018/02/07/175349.htm?bypass=0b9e525e6eb924a4db96f217d467f68d 
I think that Banner just creates more speculation on price 
