Insurance is key for financially securing important assets. Yet, the cryptocurrency sector — which is predicted to reach a global market size of $4.94 billion by 2030 — may be lagging behind when it comes to insuring digital assets.
For instance, it’s been noted that less than 1% of all crypto investments are currently insured. This statistic is alarming, considering the rapid growth and high-risk profile associated with today’s cryptocurrency market.
Ben Davis, team lead for digital assets at Superscript — a British startup and Lloyd’s of London-licensed insurance broker — told Cointelegraph that crypto has been marginalized when it comes to insurance solutions.
“Superscript has spent years focusing on insurance for emerging tech fields. I lead a team that focuses specifically on crypto and never in my career have I seen an industry more marginalized,” he said. Although the cryptocurrency sector is advancing, Davis believes that it continues to lack insurance solutions due to the industry’s strong financial focus. He said:
“Crypto is tackling something very fundamental, which is money. But, as a society, we tend to shy away from this topic. When a technology sector focuses on hard questions relating to value and exchanging money, insurance underwriters tend to move away from this conversation.”
Growing need for crypto insurance
Although this may be, the need for insurance solutions within the crypto industry is becoming more important than ever before. In order to fill this gap, Davis explained that Superscript is taking a centralized approach to bridge the divide between traditional insurance providers and crypto companies. “We translate the risks associated with digital assets to the broader insurance community. Everyone on our team holds and interacts with crypto, so we speak the language,” he commented.
As a Lloyd’s broker, Davis elaborated that the firm has experience getting customers in front of multiple insurance companies. As such, the firm has a centralized finance (CeFi) approach by presenting crypto companies to insurance providers suitable for their needs. “We work with many nonfungible token organizations, or crypto companies partnering with big names in entertainment, to help secure contracts with traditional insurance firms. We provide insurance for the full spectrum of digital asset businesses including tokenization platforms, miners, custodians, blockchain developers and more,” he shared.
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