AIG, Allianz, Chubb & XL Group Insurers Look to Cover Crypto Businesses
Big insurers now trying to cover crypto-related businesses
Large insurance companies like XL Group, AIG, Chubb, and Allianz are attempting to create new coverage options that will include crypto-related businesses.
Crypto-business insurance desperately needed
Insurances for crypto businesses are one of the biggest things that are making large investors hesitant to join the crypto world. Not being able to have insurance for an entire business certainly doesn't sound that appealing to those who have the most to lose. This is why large insurance brokers are trying to find a way to create coverage options for such businesses, and include the crypto world as part of their offer.
One of the biggest insurance brokers in the crypto world, Aon, claims to be occupying as much as half of the crypto insurance market. Not only that, but the firm has stated that they see more and more protections regarding the crypto industry in the future.
Marsh & McLennan, which is another insurance broker, has stated that they have formed an entire team with a goal of developing broker policies for startups dealing with blockchain technology. They also said that 2018 is a big year for this part of their business.
Some sources claim that premium deals for crypto-oriented startups are known to match, or even exceed the average insurance costs up to five times more than what traditional insurance policies require. Of course, these policies are no small thing, and they can sometimes need over 12 underwriters in order to cover $5 to $15 million of protection for each.
Of course, these prices only go for those premiums that are considered to be extremely risky. The even responsible for their existence is the Coincheck hack that occurred some months ago, at the beginning of the year. This is when more than $532 million in cryptocurrencies was stolen by hackers.
The crypto-insurance game is a large opportunity
A lot of major insurance brokers are not as open to reveal the exact extent of the coverage that their deals are offering. Some brokers even openly refuse to cover wallets or crypto exchanges, and are keeping the right to be extremely careful about who they provide their services to.
Some, like AIG (American International Group), on the other hand, confirmed meeting with various trading platforms and crypto custodians for the possibility of making a protection deal. Still, even the AIG refused to reveal the cost of crypto premiums made so far.
Insurance for cryptocurrencies will, without a doubt, be a big deal, and a great opportunity soon. This was even confirmed by Allianz's Christian Weishuber. He stated that digital currencies are becoming more and more important and relevant in today's business, and that proper coverage options need to be explored and created in order to match customers' requirements. According to reports, Allianz is already providing some individual coverage regarding the cases of crypto thefts, and has been doing so for over a year now.
As for the solutions regarding the exchanges, some of them, like Coinbase, have customers' funds stored in hot wallets insured. This includes around 2% of the assets belonging to customers. However, the exchange did not specify the exact extension of the coverage.