The crypto world received a jolt of surprise when English insurance big shots, Lloyd’s of London and Aon revealed their plans of venturing into the crypto-insurance business.
Lloyd’s of London, the global leader of the insurance sector, boasts of the whopping market worth of over $45 Billion is adamant about exploring new business strategies and has planned to start its ambitious project concerning the cryptocurrency. Some time back, Lloyd’s of London fostered digital asset trust firm, BitGo’s project in which the firm pledged insurance funds for digital assets by offering security against theft and other mishandling activities for a total of $100 Million.
The USA-based crypto exchange, Coinbase announced its plans for insurance covering worth $255 Million facilitated through Lloyd’s platform.
Aon, on the contrary, will be offering crime insurance coverage for organizations employing crypto-asset infrastructure solution, Metaco’s SILO for hot and cold storage.
With big business houses and spearheads of reputed conglomerates diving into the digital currency space, the news of Lloyd’s of London and Aon coming together to put in their genius in this sphere is surely not a surprising move.
They say that where there is an asset, the bigwigs of the insurance sector will surely get attracted towards it. No business house is ready to let go of the lucrative profits which cryptos are offering to its investors especially in the insurance domain. To the delight of the crypto enthusiasts, the total market capitalization of the digital assets including coins, tokens, and other entities, is close to the mark of USD $300 Billion which accounts for a sharp 25% increase.
The Scope of Crypto Insurance Is Increasing:
The insurance coverage stands at $1 Billion marks while crypto-assets market smiles with a $300 Billion whopping figure. This shows the huge gap between the demand and supply of insurance coverage, by also revealing the much-obvious potential of the crypto-insurance pedagogy. One of the prime reasons for the insurance giants showing interest in the virtual currency domain is to bridge the wide gap.
Security threats are quite common in the blockchain network with some of the biggest and reputed crypto exchanges getting embarrassed after getting attacked by hackers and scammers. There exists a strong interdependence between crypto-insurance and security compromises. Recently, Binance, the notable crypto asset exchange, had to face theft of $40 Million. These incidents put the credibility of such custodians into question.
Crypto insurance sector is new for the world and is growing slowly and steadily in its development phase. Based on the statistics, premium revenues from crypto-insurance firms falls between $200 Million to $500 Million.
The U.S regulatory firms are constantly under pressure to bring rules which allow guidelines on public companies to also circumscribe digital assets. After the proper framing of rules and regulations, there is expected a boom in the crypto-insurance sector.