Insurance innovation: from crypto confidence to decentralised risk transfer
Insurance innovation: From crypto confidence to decentralised risk transfer
While significant progress has been made in insuring digital assets, clearer regulation is needed for the industry to flourish.
Panellists:
- Phil Rage, Head of Underwriting at Soter Insure
- Christian Niedermuller, COO of KuCoin
- Oliver Tonkin, President and Co-Founder of BCB Group
- Moderator: Ed Pugh, Client Director at Aon
The recent Chartered Insurance Institute’s “Crypto Confidence” event at Lloyd’s showed the growing institutional appetite for digital asset insurance.
Recently, Lloyd’s made its first strategic investment in digital assets, backing Circuit from their central fund. For many market participants, this is a signal to the market that one of the world’s most selective insurance institutions is backing the infrastructure needed to make on-chain value move safely. Likewise, decentralised insurance tokens are emerging to cover hacks.
Featuring insights from Phil Rage, Head of Underwriting at Soter Insure, Christian Niedermuller, COO of KuCoin and Oliver Tonkin, President and Co-founder of BCB Group, this session explored insurance offerings with new institutional and decentralised models.
The panel was moderated by Ed Pugh, client director at Aon.
Types of insurance
The panel began with discussions around the importance of insurance in the digital asset space, although some on the panel noted that engaging with the insurance market could be challenging, even as the digital asset market continues to mature.
Discussions moved on to the types of insurance important for companies in the digital assets space, including directors and officers (D&O) and cybercrime insurance. For customers, embedded Treasury or asset insurance is the main focus.
The practical challenges
Volatility was one of the main challenges discussed, with digital assets requiring flexible insurance policies to match the evolving market. One panellist said: “We are dealing with a very slow-moving beast versus a very dynamic, fast-moving market.”
Crypto remains a niche space for insurers, which in turn means there are very few specialists analysing the underlying technology and the main risk factors. Additionally, companies in the digital assets space lack the years of data that insurers tend to prefer.
Challenges and opportunities in the insurance market
For classic insurers, the challenge will be to match the demand in the decentralised market. Panellists also noted concerns about the control of large custodians and the need for proper risk assessment and technical coverage.
On the opportunities side, one panellist predicted new insurance products would soon launch, such as demand insurance or transfer insurance, to cover risks in the crypto market.
The discussion concluded with the panellists agreeing on the importance of building infrastructure to support the integration of blockchain technology in the insurance industry.
