Major insurers cautiously offer cryptocurrency theft protection
Major global insurers are tentatively starting to offer protection against cryptocurrency theft.
The first steps herald an acknowledgement that, despite the enormous risks involved within the volatile new sector, its potential growth is nonetheless making cryptocurrencies attractive to the wider financial services industry. Yet the challenge will be for insurance firms to offer protection to clients they know little about.
According to the Reuters report on Thursday, digital coin sales raised more than $5bn across nearly 800 deals in 2017, according to CB Insights. There are no estimates yet how much of that has been insured or of total premiums collected.
XL Catlin, Chubb, and Mitsui Sumitomo Insurance are among the few companies currently offering protection to the industry. Yet several other firms told Reuters they are considering coverage for companies that handle digital currencies such as Bitcoin and Etherium, both of which trade between anonymous parties.
Digital currency investors are already familiar with the huge risks involved. It is thought that billions of coins have been lost through cryptocurrency hacks and technical errors.
Last week, Coincheck, the Japanese trading exchange, became the latest casualty of hackers, suffering a loss of $534m worth of coins.