It is no secret that the cryptocurrency market is still risky. And not only in volatility but also in hacker attacks, aimed at the whole exchange, and to individual holders. Therefore, the situation with insurance of crypto-asset is worth today is quite acute. However, the procedure insurance raises more questions than answers. What can be insured? How will the process of asset valuation? Whom to contact?
The lack of clear regulation and the instability of many altcoins does not give the major players of the insurance market, such as AIG, to say to the public about their presence in the market and the beginning of the backup exchange sites exchanges such as Mt.Gox (which has had to suffer from hacker attacks).
Another aspect, which simply “suggests” in the insurance industry is investing in unprofitable ICO and outright Scam. But direct insurance “against volatility” can be very expensive. In addition, some experts such a venture at all seems almost utopian.
“In principle, the idea of insurance, right altcoins are interesting, but from theft. But here the question immediately arises: how to prove that the wallet was hacked and coins were stolen and not just moved to another address? The insurance case can occur only if the action will be massive, plus you need a statement of the company, developing the wallet. Special cases of the theft insurance subject to can not. To insure the volatility is not possible — it would be like to insure the ruble from its fall against the dollar. Looks interesting, but for crypto-assets like some kind of adventure,” explained co-founder of kleptomanka Wirex Pavel Matveev.
And how will assess asset — the question is very ambiguous and requires careful study. It is not excluded that different companies will apply different tools, the choice of which will depend on many factors.
“If we’re talking about crypto-assets and purses, the assessment is likely to occur at the middle exchange rate on the stock exchange for a period of time. If you evaluate ICO, everything is a little bit easier. The evaluation takes place in the same way as any project that requests venture capital investment funds”.
The advertising component, pursuing invariably the insurance is also very negatively assessed by some experts.
“Insurance storage of crypto-currencies could be a huge breakthrough. Digital assets are becoming more important and prevalent in the real economy, and we are exploring the options of products and coverage in this area”, — told Bloomberg Christian Wasshuber, spokesperson for the European company Allianz.
Another insurance product may well be support for technology startups. Insurance support crypto-companies de facto abolished the standardization within the industry since the underwriters are literally fighting for life and death for the rewards. This situation may affect the excessive use companies loans to its partners. And this, in turn, may adversely affect the performance of investors and consumers, and the cooperation of the project with insurance creates the illusion of investment security.
“Honestly, that’s what worried insurers. They don’t want the blurb said: “We are insured against the insurance company ABC” and I don’t want her was inaccurate or misleading. It’s definitely a problem. But providing the opportunity for individual investors to insure their money — the advantage for the industry, especially given the regular hacker attacks on exchanges,” explained Jackie Quintal, leader of Aon London.
A short, but turbulent history of insurance of crypto-assets
In 2015 the service BitSecure started to offer various insurance products for holders of the cryptocurrency. Insurance “bitcoins” also released Coinbase, Inc. and Elliptic Enterprise Ltd.
In November 2016, Mitsui Sumitomo Insurance has launched a product offering to insure the stock exchanges. Interestingly, the offer includes both internal and external causes, including: theft among employees and of third parties, cyber attacks, unauthorized access and system errors. In addition, Mitsui, together with bitFlyer, a Japanese exchange, which occupies the sixth place by the volume of bitcoin trades in the world, has developed a training that helps its customers to provide proper security measures.
In General, the question of who exactly should be involved in the insurance of crypto-assets, still remains open. On the one hand, to participate in the formation and evaluation of cryptocurrencies needs of the insurance company, and with another — the largest base of expertise for assessing risks to own companies that are directly involved in the crypto industry. The ideal solution would be a joint cooperation of the first and second, as happened with Japan’s Mitsui.
What to look for when choosing insurance?
Choose an insurance company exclusively for the promises fabulous benefits and cover such losses as soaring sharply fallen or the price of a particular cryptocurrency, not worth it. If the company offers these services, you need to circumvent it — it is likely that the formation of other insurance products, the firm focuses not on the needs of the client, and to attract the maximum amount of money. However, to insure your digital assets against hackers it would be very useful. As the cryptocurrency becomes more common, companies may begin to consider using these products even if they do not consider themselves primarily technology companies, as with any new wave of technology can cause ripple effects in many industries.