Hek, Metropolis - Ray McCormack has been appointed the new Chairman of the Board at EBANK after his predecessor, Hexxx, stepped down at the end of his six-month tenure.
Former EBANK chairman, Hexxx, announced he would not be standing for another term as chairman, stepping down to pursue a new project involving the securitization of insurance policies. When the vote to appoint his replacement was called, Ray McCormack was the Board of Directors’ favoured appointee, with the vote to decide the position closing after only two days with a clear majority in his favour.
Mr. McCormack has created a multi-billion ISK business empire in his career as a pilot. He served in the management of BIG Merchant Bank of Eve, then left to begin his own project, RAYBY. This was a fixed-rate rate bond totalling 71 billion ISK. He stated “That has since closed, but during its time it was thought of as the gold standard of investments.”
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Who is Ray McCormack and should we trust him?
But what interests me more is Hexxx’s stepping down and his reasons for doing so. What do you think about the offering of private insurance? If this works this means that T2 ship PVP has just become a great deal more affordable.
Privately run insurance on T2 ships cannot make pvp less expensive. Insurance always and inevitably makes losses more expensive, not less, in order to pay for the insurance company’s overhead and profit margin. It’s just that in real life where losses insured against are relatively uncommon, insurance provides a way to pay someone else to take the risk of them happening.
But in pvp, where losses are inevitable and frequent, it makes no sense to pay the premiums of realistically priced insurance based on real actuarial information. It will be cheaper to just pay replacement costs yourself.
That makes no sense. If you insure a ship for 30m and it cost 75m and they pay out 65m then you paid in 115m and got 65m of that back for a loss of 40m ultimately.
I’m not sure how they are planning to make their money.
As for banks being scams. They are scams in real life too.
Insurance policies are wagers, and they are always, always, always wagers where the house has the odds on its side. The insurance company has reams of actuarial data which tell them what likelihood a prospective client has of incurring a loss, and set premiums such that if clients of that sort typically incur losses of X over a time period of Y, the premiums of those clients will total X + overhead + profit margin. Unless their actuarial data is flawed and they have to pay out significantly more policies than they expect, they turn a profit, and their clients pay overhead + profit margin more than they would have if they’d forgone insurance completely.
In EVE, the risk of a pvper losing a ship is so high that a private insurer will have to charge insurance premiums approaching the full value of the policy. So, if you want 100M ISK payout, and you have a 90% chance of losing your ship in the next month, then your premium from a private insurer should be .9 * 100 + profit margin, or something north of 90M/month. Assuming the insurer has reliable actuarial tables and is structured so as to run a profit, the pvper will do better to just replace the loss when it inevitably occurs rather than paying for the loss + a profit margin for the insurer.
Current in-game insurance, of course, bears exactly zero resemblance to any real insurance.
Yep. There’s really no point, and I can’t see how any profit margin is possible.
I’ve dropped an email to Hexxx and maybe he can fill me in on what’s going on.
Yeah, there are several. I thought about setting up a Ponzi scheme, decided it would be too much work. It wouldn’t be terribly difficult to accomplish.
I’ve been in touch with Hexxx.
He provided me with thesethreelinks.
I’ll also be getting a copy of his actuarial tables but no, I cannot share the data with you or anybody else. I’ll also probably pubish an interview with him in the next several weeks. From what I can outline now his plan is simple insurance to be up and running in the next three months or so, and securitization to be up and running in about a year.
Reading over his insurance proposal it seems like a complete waste of time. His main market is carebear miners who don’t have much incentive to insure their ships.
