The cryptocurrency insurance market is expected to outpace cybersecurity insurance, with giants like Lloyd’s of London and Aon among potential major players.
The cryptocurrency insurance market is expected to grow at a faster rate if United States regulators provide more regulatory clarity, according to industry experts.
As Forbes reported on Sept. 5, CEO of San Francisco-based cybersecurity agency Coalition, Joshua Motta suggested that the market for digital currency insurance is now worth between $200 million and $500 million in premium revenue. He expects the market to outpace the current 20% to 25% expansion rate of the cybersecurity insurance sector.
Lloyd’s of London, the world’s leading insurance market providing specialist insurance services to enterprises, seems poised to become one of the major players in the crypto insurance sector following April news of Coinbase revealing insurance coverage for its hot wallet crypto holdings, reportedly covering a $255 million limit via Lloyd’s.
“The next cyber”
According to Eric Boyum, head of the technology insurance brokerage arm of Aon — an insurance broker that purportly occupies 50% of the crypto-insurance market — the crypto market insurance sector would grow even faster once U.S. regulators clarify whether digital assets are deemed securities and should comply with the same laws that govern public companies.
Commenting on the issue, Ty Sagalov, insurance industry veteran and founding member of the first licensed and regulated insuretech company in the U.S. Lemonade, said:
“I see this market as the next cyber. It will grow to a multi-billion-dollar premium market within the next five to ten years.”
Crypto goes into insurance
This summer, Coinbase was reportedly looking to launch its captive insurance company in partnership with Aon. Such a solution was expected to allow the company to keep the money that would be normally spent on the insurance premium, reportedly nearly all Fortune 500 firms maintain captive insurance companies.
Also, Aon will reportedly provide crime insurance coverage for institutions using Metaco’s SILO cryptocurrency asset infrastructure solution for hot and cold storage, which implements hardware security module-based technology.