Crypto Insurance Gains Traction
More insurance companies are looking to get into a new market: insurance for crypto investors.
Insurance giant Allianz started offering coverage against cryptocurrency theft for private investors last year as the market saw an explosion of new investors coming in. “Insurance for cryptocurrency storage will be a big opportunity,” Christian Weishuber, spokesman for the company, told Bloomberg.
He added that “digital assets are becoming more relevant, important and prevalent on the real economy and we are exploring product and coverage options in this area.”
However, according to the report, few insurers want to talk about their interest in crypto in public. Several insurance companies simply declined to comment on the matter, with one company stating that it does not offer insurance for “cryptocurrency exchanges or wallets,” without offering further details.
XL, a Bermuda-based insurance company, told Bloomberg that it is being careful regarding the risks of this emerging business, and that it analyzes business opportunities in the field “on a case by case basis.”
Some, however, see it as ironic that the crypto industry is looking to traditional insurance companies for protection, while claiming to liberate people from the grip of the financial industry.
Also, Hillik Nissani, COO of Cryptalgo, a support firm for institutional trading, said that the number of exclusions in the policies available today make them “close to useless” for most companies.
His company is reportedly looking to self-insure rather than buying an expensive policy, explaining that coverage amounts often don’t even cover the sum that could potentially be lost in a theft.
One of South Korea’s largest cryptocurrency exchanges, Bithumb, is an example of insufficient insurance. As reported, the company is “unlikely to receive a payout from its insurers” following a USD 32 million hack – despite the fact that it spends more on insurance policies than any other exchange in the country.