German peer-to-peer insurer Friendsurance’s expansion into Australia will be led by Perry Abbott and backed financially by Ellerston Ventures, the venture capital arm of Ellerston Capital.

Mr Abbott has been a director at Friendsurance since December 2012. Before that he held senior roles at Reliance Partners, OAMPS, Superpartners, technology services company CSC and Rio Tinto.

He says the time is right for Friendsurance to start operations in Australia because “customers are looking for new and different options in the insurance space”.

Friendsurance puts customers into groups of about 10, with each contributing part of their premium to a pool that covers smaller claims. If no claims are made during a year, they get that money back, equating to 40% of their premium.

“In Germany Friendsurance customers have received on average 33% cash back annually in property lines, which is an incentive we’d like to bring to our Australian customers,” Mr Abbott said.

He sees the cash-back incentive as just the beginning of insurance’s evolution.

“People will always buy insurance because it makes good sense to be protected, but our lifestyles are changing and the risks we are exposed to are different today than they were 20 years ago.

“Friendsurance wants to work with the insurance industry to offer customers new dimensions in insurance products they’ll feel good about.”

The Melbourne-based business plans to introduce its first product early next year.