Why Inverse Insurance Matters?
"If something's important enough you should try. Even if the probable outcome is failure."
In other words, -- if value is large, the expected value is still large, even if the probability is small. Unfortunately, today, insurance industry is only considering the bad things of low probability that are important enough, not the good things. We insure against catastrophes, ill health, and car accidents. We don't insure ourselves from the extremely good things that could happen -- namely, from what would happen if we didn't miss an important invention or technological breakthrough. What happens if coming up with a viable cryoprotectant is 5 years earlier than it would be otherwhise without the inverse insurance incentive? What happens if emergency vascular pump is brought a year earlier than it would be without an incentivize?
These questions can be answered based on general statistics. 150K people die every day, and approx. 20K from ischaemic heart disease. So, these are the people we could save every day. We could compute very specific losses if technological breakthrough does happen earlier rather than later.
Prize foundations is a good start for such inverse insurance. However, this perhaps is not enough, and probably not the right way to do it. Usually, prize sizes are relatively arbitrary, depending more on the desire of possible donors than a rational computation of expected loss on an event. However, they could be calculated, based on expected loss with respect to early breakthroughs implementation, and be used to reward the economy. For example, many companies have hidden new products in secret "refrigerators," that they think the time has not yet come for the market, calculating when it will be the right time to release them. The inverse insurance could also be used to reward early releases of transformational products.
We could reform the insurance industry to insure not against, but for the early implementation of great ideas. And, an international "inverse insurance day" could be the day, when manufacturers massively release new not seen before products.Read more