Report: Banks are Secretly Offering Cryptocurrency Insurance to Businesses

Despite the notorious hacks and thefts surrounding the cryptocurrency sector, big-name insurance firms alike Allianz and AIG are quietly making their presence felt in the industry, offering insurance deals to digital asset businesses.

As reported by Bloomberg on July 19, 2018, companies like XL Group, Allianz, AIG, and Chubb are creating customized insurance packages for protecting cryptocurrency businesses.

Interestingly, London-based Aon reportedly captures over 50% of the cryptocurrency insurance market, with new industry-specific protection deals surfacing regularly.

Cautious policies are in place for the sector and have up to "a dozen underwriters" with $5-15 million in protection bonds per insurance.

Bloomberg spoke to Chubb and XL, who stated no insurance would be written for cryptocurrency exchanges and all deals are conducted on a case-by-case basis respectively.

Coinbase, recently in the news for its security token statements, is reportedly one of the largest cryptocurrency firms to purchase insurance.

Interestingly, blockchain technology, the fabric of all cryptocurrencies, is touted as a significant tool for the insurance industry itself.

London-based Lloyd's, the world's oldest and most prominent insurance market, published a bulletin in July 2018 appealing its agents to proceed with a risk-seeking, cautious view for insuring the volatile asset class.

Smaller cryptocurrency firms are not cultivating smooth relationships with insurance firms.

While the firm eventually ended up with one deal, it dropped the policy in 2016 after citing high costs of maintaining insurance.