Blockchain, cryptoasset development being held back by insurance concerns – Evertas | Insurance Business Canada
The lack of a robust insurance market is hampering the adoption of cryptoassets and blockchain infrastructures, according to Evertas, the world’s first cryptoasset insurance company.
Last year, 55% of insurance executives interviewed by Evertas believed that companies were holding back on developing blockchain initiatives and cryptoassets because they couldn’t sufficiently insure those activities. Only 20% of those surveyed disagreed with this view, Evertas said.
Eighty-seven per cent (87%) of insurance executives said they felt directors and senior executives were at risk of being sued if their organizations suffered losses or thefts linked to blockchain and cryptoasset activity, and they didn’t have adequate insurance in place.
Only 20% of insurance executives believed organizations were effective in assessing the risks posed to their blockchain and cryptoasset storage systems. Thirty-five per cent (35%) believed there was a high chance of cryptoasset or blockchain-related insurance claims being rejected because the risks involved weren’t properly assessed or recorded when the insurance was taken out.
“Cryptoassets are increasingly becoming mainstream,” said Raymond Zenkicj, president and COO of Evertas. “This trend will be further fuelled by more traditional and illiquid assets being tokenized, making it easier to trade and invest in them. There is increased use of smart contracts for owners and investors in these assets to interact with counterparties, and increased acceptance of blockchain as core infrastructure across industries to record ownership, provide an audit trail, and unlock completely different business processes and applications. However, for this market to really reach its full potential, it must be supported by a viable insurance market.”
Zenkich said the increased acceptance of blockchain represented “an exciting business opportunity” for insurance companies.
“Clients will increasingly expect them to understand the risks associated with cryptoassets and blockchain, and to provide them with relevant cover,” he said.