The CEO of Friendsurance Australia says he does not consider the peer-to-peer insurance company a disruptor, but rather a “new dimension” to the industry.

Perry Abbott told insuranceNEWS.com.au the world-first model is about making insurance more intimate and providing an alternative to dealing with “faceless organisations”.

Friendsurance integrates with Facebook to group 10 family members or friends together, to create an insurance pool for small personal lines claims.

If no one claims, members receive back up to 40% of their premium. In its original market of Germany, customers get back 33% a year on average in property lines.

Mr Abbott says users are less likely to claim because they are taking money from people they know. This saves money for the consumer and the insurer.

“It changes the economics of how insurance works by changing how people behave,” he said. “It makes you think when you put in a claim, ‘I’m going to take money off these people.’

“We do want to make insurance more affordable, and ultimately insurance is about a shared pool of losses.”

Friendsurance Australia is backed by Ellerston Ventures, which was set up earlier this year by major investment company Ellerston Capital to invest in disruptive technologies.

Mr Abbott says his company will introduce its first product early next year. He is confident it can emulate the success of Friendsurance in Germany, which boasts six-digit customer numbers, 70 insurance partners and more than 80 staff after just six years.

Australia appealed to the insurtech’s founders due to its large insurance market, tech-savvy nature and social culture.

He says running the model here will be about “test and change, test and change”, but he remains confident insurers and consumers will benefit.