Insurance companies like to keep things predictable and conservative when they offer coverage, but although many of the big names remain silent, cryptocurrency insurance prime-movers like Allianz are raking in high premiums for coverage that protects cryptocurrency start-ups and investors.
According to reports, insurers are charging cryptocurrency-based concerns up to five times the premiums they would expect from regular businesses to cover theft or losses. An Allianz spokesperson is on record as saying that insurance for cryptocurrency storage represents a significant opportunity for the insurance sector.
Leading Brokers Compete for Cryptocurrency Insurance Clientele
Marsh & McLennan as well as Aeon are currently taking the lead in brokering insurance policies for cryptocurrency companies and have reported an uptick in demand. In response, Marsh has assembled a team that will be dedicated to serving blockchain start-ups.
Meanwhile, Aeon says it has cornered more than half the market for crypto insurance and has streamlined is processes to speed underwriting. Aeon also reports that certain general business insurance policies are including clauses related to cryptocurrency protection.
Insurance Companies Remain Cautious
The firms providing the policies are reticent regarding the volume of business they are handling, but XL told the press that it considers cryptocurrency-related insurance applications on a case-by-case basis. Chubb disclaimed interest in insuring exchanges and wallets while refusing to comment on whether it provides insurance to other forms of cryptocurrency venture.
Meanwhile it appears that insuring the cryptocurrency industry may not be as risky as all this caution seems to indicate with Marsh and Aeon saying that, to their knowledge, no cryptocurrency-related claims have as yet been processed.
Lloyd’s of London is known to have published a bulletin requesting “caution” and recognition of risks on the part of its agents.
Cover May Fall Short Despite Top Premiums, but Crypto Companies are Willing to Pay
Crypto companies are willing to pay top dollar for crime and cybersecurity coverage, and the willingness of insurers to step up to the plate, no matter how reticent they may be in public statements, is seen as yet another indicator of an industry that is becoming fully legitimized.
However, crypto company insiders warn their colleagues to exercise caution. Insurance policies are packed with exclusions that may make the policies all-but-useless. And insurers are highlighting their conservatism in the coverage amounts offered.
Exchanges are combatting this by continuing to exercise caution, with certain players covering “hot wallets” used for trading while keeping most digital assets offline for the sake of security.