Lloyd’s of London is hundreds of years old and is one of the most famous insurance brokers in the world. Now, it has quietly taken its place in the cryptocurrency insurance market.
Kingdom Trust, a qualified caretaker of some 30 cryptocurrencies and tokens, is enhancing its custodial services with insurance cover for theft and loss due to natural disaster, courtesy of underwriters at Lloyd’s. A ‘qualified custodian’ is one that “guards the private keys of troves of cryptocurrencies to a standard deemed acceptable to regulated financial institutions.”
Matt Jennings, CEO of Kingdom Trust, said in a statement, “We serve both institutional and individual investors by providing qualified custody, which gives our clients the framework they need to ensure compliance with their regulators using clear and transparent reporting.”
Cautious insurers are watching crypto market
The insurance sector is notoriously cautious, but it seems that it is gradually becoming involved with cryptocurrencies, but for the moment they are all keeping a low profile. Others that are currently involved include AIG, XL Catlin, Chubb and Mitsui Sumitomo. Even Lloyd’s is proceeding slowly and its syndicates have been told to be ultra-cautious about digital assets, “and ensure that managing agents have the required expertise in the underlying risks,” says Coindesk.
However, Jerry Pluard, president of SDBIC, says this acould all be about to change: “About 10 syndicates in Lloyd’s have indicated a willingness and are somewhat active in evaluating crypto exposures.”
He went on to say: “Of those 10, 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.”
Matt Johnson, chief product officer at DACC (Digital Asset Custody Company), said his company has been looking at insurance policies over the last few months, and added that he didn’t find it at all surprising that Lloyd’s had entered the arena as an array of insurance firms are keeping a close watch on the new financial technology sector, but the big challenge s how to structure a policy so that they actually do offer protection.