Forms of Mutual Aid in the SNS Era

2020/05/28

In October 2018, China's Alibaba Group launched a medical coverage service for its members, and in just one year, the number of subscribers surpassed 100 million. This is a phenomenal rate of growth. The most significant feature is that, unlike general insurance, no premium contribution is required at the time of enrollment; instead, the total amount of benefits paid and administrative costs are "split" among the subscribers after a claim occurs. Interestingly, the basic form of this system existed long before insurance was introduced to Japan by Yukichi Fukuzawa, and in Japan, it has been called "tanomoshiko" or "mujin." In a sense, it can be said that an ancient system of mutual aid has been recreated within modern Social Networking Services (SNS).

To begin with, the function of insurance has its roots in "risk pooling." For example, let's assume that two people, A and B, each have a 0.2 probability of encountering an accident resulting in a loss of 5 million yen (assuming the accidents occur independently). Now, suppose the two make an agreement that "when a loss occurs, the two will split it in half" (this is called "risk pooling"). When we are in the position of A (or B), most people would want to implement this agreement. In my field of expertise, people who make such a choice are called "risk-averse." Roughly speaking, through "risk pooling," the probability that both will encounter an accident and each have to bear 5 million yen becomes 0.04 (0.2 x 0.2), so the probability of extreme outcomes (a loss of 0 yen or 5 million yen) decreases, creating a stable situation. "Risk-averse" people prefer this kind of situation.

Come to think of it, no matter how much technology advances, human nature may not have changed since ancient times. For instance, if their salary remains much the same, many people would likely prefer a more stable life. They are "risk-averse." There are many commentaries suggesting that Alibaba's new service is a threat to existing insurance. However, if we look at it from the perspective of insurance functions, it is simply a "throwback" to its origins, predicated on our universal human nature. By grasping this scientifically, we can think deeply about the essence of things that appear new at first glance. This is where the joy of "academic pursuit" lies.