The cryptocurrency market has had an immense growth worldwide despite the many hiccups like the Bitcoin crash of 2017. More tokens are being launched, more exchanges are being opened, and more ICOs are being started. Big tech companies like Amazon, Facebook, Google, and IBM are working on their own blockchain projects. Banks and Wall Street firms are beginning to trade in cryptocurrency. All in all, things are going pretty well.
Unfortunately, the banks and big tech firms are not the only actors who have noticed the rise of cryptocurrency and want to get in on the action. Hackers and scammers have also begun ramping up their attacks in tandem with the rising popularity of cryptocurrency. This has resulted in several cryptocurrency exchanges being hacked, and many traders losing their tokens. The value of several tokens has also taken a hit as a result of the bad publicity. But now the insurance industry is coming to the rescue.
Insurance for cryptocurrencies
Bloomberg has reported that several insurance companies are creating policies specifically for cryptocurrency traders and businesses. The only concern many have is the volatility of the cryptocurrency market. This volatility has led several insurance companies to charge up to five times as much for cryptocurrency insurance policies than other policies. However, this is bound to even out as more and more insurance companies enter the market. Competition between the companies will drive prices down to reasonable levels.
Who are the main insurance companies?
A spokesman for Allianz has expressed that the insurance giant sees cryptocurrency as a big opportunity. Allianz began offering solutions last year, and their services included covering the theft of cryptocurrency. Allianz sees that cryptocurrency is becoming increasingly relevant, and an integral part of the global economy. For this reason, they are only looking to expand their portfolio of insurance products.
American International Group is another insurance provider that has begun to include cryptocurrency assets in their standard policy forms. The oldest insurance market, Lloyd’s of London, has also published a statement that advises their agents on how to deal with cryptocurrency insurance. Lloyd’s have, however, advised their agents to proceed with caution, given the risks associated with the market.
Aon and Marsh & McLennan are two prominent insurance brokers that help individuals and businesses shop around for the best deals on insurance products. They both report seeing a large growth on the horizon. Marsh & McLennan has even created a dedicated team to deal with cryptocurrency startups that have launched their own ICOs. Meanwhile, Aon report that they have half of the cryptocurrency market covered.
No payouts just yet
Because the concept of cryptocurrency insurance is still brand new, there has not been any instances of payouts yet. However, this is set to change this year, as hacks are predicted to be ramping up. Not all insurance policies are equal either. Some include loss of tokens due to technical errors in a blockchain service but exclude the theft of cryptocurrencies. Cryptocurrency exchanges like Coinbase, however, have secured great insurance policies in order to protect the traders.
Are you thinking of taking out a cryptocurrency insurance? Let us know in the comments!