No, neither do we here at IE magazine. It is a confusing and rapidly evolving sector of the global finance and monetary system, but there is demand for asset protection of course. Now Evertas, the world’s first cryptoasset insurance company, says there is a serious problem of ‘phantom’ knowledge of cryptoassets from insurers.
The company has been engaging with several insurers and brokers on the issue of insuring cryptoassets, and has found many wrongly claim to have a good understanding of the risks associated with these assets, and mistakenly believe that the sector’s underwriting and pricing in this area are strong.
Evertas argues that with a global capacity of just $1 billion to $2 billion from insurers for a market that is worth over $250 billion, and with no dedicated underwriting or claims teams, they hugely overestimate their level of understanding of cryptoassets and the quality of service they provide to this market.
New research from Evertas amongst senior insurance executives reveals that 68% believe the quality of underwriting of cryptoassets within the industry is good, with just 32% describing it as average or poor.
Similarly, 76% believe the pricing of insurance cover for cryptoassets is strong, and 42% say the claims process is good or excellent.
J Gdanski, CEO and Founder of Evertas, said: “Cryptoassets and blockchain systems involve multiple disparate technologies and a range of risks including cyber, regulatory and fraud that are unlike any other market. Although our findings reveal that senior insurance executives believe the sector has a good understanding of the risks around cryptoassets and that underwriting, pricing and claims are effective, the reality is they are not. Proof of this can be found in the market’s woeful lack of capacity for the cryptoasset and blockchain markets.
“However, there is little doubt that the market capitalisation of cryptoassets is growing rapidly and that it represents an exciting opportunity for insurers and brokers. Their challenge is to build the knowledge and expertise needed in-house – although this can be expensive and take a long time – or partner with specialists in this area like us.”
Evertas believes it’s the only company in the world focused solely on providing insurance coverage for cryptoassets and users of blockchain systems. It has a unique offering providing a full suite of services for these assets – from risk audits, to underwriting, investigations and claims handling.
Founded in 2017, Evertas has a world-leading team led by an experienced group of executives including the founding Chief Insurance Officer (and founding member) of Lemonade, a blockchain team leader at Bank of New York, and a blockchain industry insurance expert. The founders have over 40 years of combined experience in the insurance sector, and more than ten in the crypto and blockchain markets.
Earlier this year, Evertas received its licence from the Bermuda Monetary Authority to start operating from the jurisdiction. It operates as a ‘Class 3A’ insurer.