Lloyds of London, the world’s leading insurance market providing specialist insurance services to businesses in over 200 countries and territories, has moved into underwriting crypto with a new account through its business syndication.
UK underwriter Lloyds, which was established in 1765 when button maker John Taylor and iron dealer Samson Lloyd first set up a business together, has added another page to its long history through its connection with South Dakota registered Kingdom Trust, a company which provides customized and innovative digital currency custody solutions for institutional clients.
The trend is clearly changing with more insurers considering providing services to cover custodied digital assets, with AIG, XL Catlin, Chubb and Mitsui Sumitomo Insurance all looking at this insurance sector as cryptocurrency grows in stature and popularity.
Until now insurance companies have very much stood back from the industry and some have not disclosed whether they are actually covering institutional assets such as cryptocurrency, due to the risk of compromised client accounts due to fraud and technical errors. Despite such risks, the sector is opening up.
“Insurance for cryptocurrency storage will be a big opportunity,” said Christian Weishuber, a spokesman for Allianz, who offer individual coverage for digital-coin theft. “Digital assets are becoming more relevant, important and prevalent on the real economy and we are exploring product and coverage options in this area.”
Its reported that Kingdom Trust, who has USD 12 billion in assets, secured the account due to the company’s cold storage protocol with the client’s digital currency stored offline. The broker who secured the account, Illinois-based Safe Deposit Box Insurance Coverage (SDBIC), says that Kingdom Trust’s level of security earned them a “drastic discount”.
SDBIC president Jerry Pluard suggests that Lloyds are comfortable with the direction it is moving in with this account and that more syndicates are looking at crypto. He commented:
“About ten syndicates in Lloyds have indicated a willingness and are somewhat active in evaluating crypto exposures… Of those ten, I would say there are five that have the level of expertise that allows them to be comfortable enough to do the analysis and underwriting of the risk, and then the other five will follow on with those leads in writing exposure.”
Kingdom trust reportedly stores 30 different digital assets including Bitcoin, Ethereum, Litecoin, Ripple and ZCash.
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