TrustCloud Community Manager Francesca Pick talked to Tim Kunde, the founder and Co-CEO:

“Friendsurance has a very unique and revolutionary approach to insurance. By using the power of social networks, your service is able to offer liability, legal and household insurance at a very low rate. Tim, how would you describe your business model in a few sentences?

Friendsurance brokers insurance coverage from various companies in the insurance market. What is unique about the insurance plans we offer on Friendsurance is that small insurance claims are covered by the social networks of our customers, while big claims are still covered by the insurance companies. This system reduces a number of costs, as for instance fraud, and has the result that we can return cash to our customers each year, without reducing their coverage. The process of covering claims through your social network is automated, so that no additional effort is required by our customers.

How was the idea for Friendsurance born?

Our founding team had been looking at large online trends for a while, social networks obviously being one of them. What struck us was that this trend had not entered the insurance market at all, although, in its origins, insurance used to be a very social product: hundreds of years ago, big families and villages joined forces to help each other out when there were fires or floods. In a way we are trying to recreate this type of system with modern technology.

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This idea is very innovative and is probably not so easy for some people to initially understand. What reactions to your service have you received so far?

In the beginning, people didn’t understand the idea–and when they did, they were often skeptical or even scared. Now, after numerous usability tests and steps of product innovation, most people who get in touch with us like our model and also use it, because they realize that Friendsurance offers a risk free way to save money with little effort.

What have been your biggest challenges so far?

As always when new ideas are born, not everybody is easily convinced. So, apart from the “normal” challenges of finding investors and a good team, we had to convince insurance partners as well as customers of our model. This takes a lot of time and effort, and only works if you listen to user feedback and constantly improve your product to meet your customers’ needs. I think, this is something Friendsurance has become very good at.”