Crypto insurance-the beginning of an era
How do insurance companies learn to deal with the risks inherent in the cryptocurrency world? Insurers say little and write about it, and you won’t see ads advertising similar services, but according to insiders, crypto insurance is a new growing business that more companies are trying to join. It is clear why the industry giants like AIG, Chubb or XL Group are silent about this — at first glance, insurance of cryptocurrency risks seems absurd, because this world has a reputation of the Wild West. There is no regulation, and consumer fraud and theft of funds — rather the rule than the exception (suffice it to recall the famous history of the exchange Mt. Gox and the recent attacks on Bitfinex and Coincheck), and the collapse of bitcoin in the beginning of this year does not add to business confidence. Nevertheless, cryptocurrencies and blockchain are gradually turning from exotic to mainstream, and insurers are learning to work with the risks inherent in this area, and insurance premiums can be very significant — according to some reports, the crypto-currency company’s insurance against theft or loss of funds can cost five times more than traditional business.

“Insurance of cryptocurrency storage is very promising. The relevance of digital assets is growing, they are increasingly affecting the real economy, so we are exploring the possibility of creating products for this area.” Although many young companies can not afford such services, two leading insurance brokers selling cryptocurrency risk insurance, Marsh & McLennan and Aon, expect a significant revival of business this year — in Marsh created a team of 10 people specializing in blockchain startups. The Aon company, which, according to its own data, occupies more than 50% of the crypto insurance market, has recently simplified the application form to accelerate the conclusion of the contract. Also, representatives of the company report that some insurers include protection against cryptocurrency risks in General insurance programs.
Today, there are more and more crypto-currency startups in which insurance is considered mandatory. According to a number of brokers and industry experts, cryptocurrency companies usually want to insure against cybercrime, as well as protect against possible claims of top management and Board members-annual premiums can reach 5% of the insurance coverage. According to the informed source, if the company wants to organize a wide insurance coverage of risks, it has to enter into contracts with a dozen underwriters, each of which offers coverage from 5 to 15 million dollars — thanks to this practice, in case of trouble, no insurance company will be affected too much.
The future of blockchain technology Greg Dispute of Maersh believes that insurers are just trying to conduct a reasonable policy. The dispute, the leader in sales of financial products of the American division, says: “This is a new technology, it is developing rapidly, and there are risks associated with security. This is a big problem”. Nevertheless, the Dispute, which has been working in Marsh for two decades, believes in the future of cryptocurrencies — this is important if you are engaged in crypto-currency insurance. He says: “I’m a huge enthusiast of blockchain technologies.”

