By Olga Kharif, Brian Louis, Julie Edde, and Katherine Chiglinsky
In the staid and buttoned-up world of insurance underwriting, few want to talk about it. You won’t find many ads promoting it or details on company websites offering it.
But according to industry insiders, there’s a hot new business that more and more firms are looking to get into: crypto insurance.
It’s understandable why big names like AIG, Chubb and XL Group haven’t provided too many specifics. On its face, providing coverage to crypto startups might seem borderline absurd. It’s an industry with a well-deserved reputation for being like the Wild West — an unregulated digital frontier where frauds and heists are rife (recall the hacks of Mt. Gox, and more recently, Bitfinex and Coincheck) and get-rich-quick schemes abound. The collapse in the price of Bitcoin this year hasn’t helped matters either.
But as cryptocurrencies, and their underlying blockchain technology, slowly gain broader acceptance, some insurers are betting they can avoid the pitfalls. The premiums from insuring such risk can be substantial. By some accounts, underwriters can charge a crypto-related company upwards of five times or more than your average business for coverage against loss or theft.
