Jacob Waites

The Concept

Brella is a peer-to-peer marketplace for flight delay insurance leveraging data-driven risk models for dynamic premium pricing and Smart Contracts for instant, claim-free insurance payouts.

Travelers engage with Brella through a Chrome extension, which activates at the point of purchase of a flight on an airline website.

Brella provides a risk score for flight delay and cancellation, explanation, and tiers of insurance premiums, which offer variable payouts for delays of different lengths. User and payment information is stored in a Brella account and individual premium purchases for each flight are pooled into a Smart Contract, which serve as the financial instrument available for investment.

Investors can use Brella through a portfolio-based investment interface, like Betterment or Wealthfront. Based on the size of their fund and risk profile, Brella makes targeted flight investments for each individual, pooling multiple investors into each flight’s Smart Contract.

Part of the underlying technology that powers Brella is an algorithmically generated risk score, which represents the likelihood and magnitude of a flight delay or cancellation. This score uses historical data such as departure/arrival times, airport/airline, and weather, and includes machine learning horsepower to help Brella price premiums and provide insight to our customers to make informed decisions.

Peer-to-peer marketplaces cut out the middleman, in this case the insurance company that sets prices, has the power to approve claims, and receives the bulk of profits from premium purchases. Smart contract technology offers an opportunity to provide better outcomes through trustless systems of instant, claim-free payouts upon the occurrence of an event. By more directly connecting buyers and sellers and providing clarity of payout terms and risk-based pricing, we believe we can spur growth in the insurance market and provide a better experience for travelers and investors.

Flight delays and cancellations are common annoyances travelers face. We can’t make up for missing a life event or being late to a an important meeting but we think Brella can serve as something to ease the pain a bit. By leveraging novel Smart Contract technology, Brella allows customers to get paid when they are delayed or canceled without them having to submit any claims. Because we don’t have to hire people to process claims, this means instant payout and lower premium fees. All payouts accrue by the minute once your delay begins and are sent upon the Smart Contract’s automatic confirmation of flight takeoff and delay time. The first payout starts at 1 hour delay and maxes out at 6 hour delay.

Building a community of travelers

Beyond building the infrastructure for insurance service, we are building a community of travelers. The cost of coverage goes to a common pool to cover payouts for all of the members. Purchasing Brella means you can protect yourself while protecting others. At the end of the year, any money left in the pool goes back to our valued members.

We experimented during our research experiences with an adoption model of an annual fee credit card as a way to bring customers into a network. This allowed for a feeling of exclusivity when joining the network, and made customers feel like they were representing a lifestyle based on their current activities with different membership tiers. The annual fees also create a larger pool for payouts.