Lloyd’s of London Ventures into Cryptocurrency Insurance
Lloyd’s of London has entered into an agreement with custodial firm Kingdom Trust to offer cryptocurrency insurance services in a move that further amps institutional entry in the digital asset ecosystem, according to a press release.
Opening the Doors to Institutional Crypto Investments
Founded in 2010, Kingdom Trust enjoys a clientele of more than 100,000 customers and handles $12 billion in assets. The firm was launched after founder Matt Jennings realized his real estate asset investments were not accepted as custodian holdings in traditional markets. The custodian service quickly grew to encompass digital asset offerings and provides custody for 30 different cryptocurrencies in both retirement and current accounts.
Kingdom Trust was acquired by cryptocurrency security startup BitGo earlier this year for an undisclosed amount. However, the latter made the purchase weeks after raising $43 million in a Series A funding round.
Adding legitimacy to cryptocurrency adoption and investments, Lloyd’s was founded in 1686 and is among the most prominent insurance firms in the world. The company is active in over 200 countries and paid out a mammoth $87 billion between 2011 and 2016.
Now, with cryptocurrency coverage for digital asset investors, clients are insured against crypto theft and asset destruction. According to Jennings:
“By adding another trusted specialist like Lloyd’s to our platform, we’re ensuring that current and future clients will have access to a highly-secure, complete safekeeping solution tailored to meet the challenges of institutional finance.”
Speaking about the partnership to Reuters, Jennings kept the identity of insurance underwriters private, including the contract cost and policy terms. However, Kingdom Trust received “drastic discounts” by using cold storage wallets instead of high-maintenance physical lockers.
Crypto Insurance Interest Rising
Insurance heavyweights like AIG, Allianz, Chubb and XL have also expressed interest in offering cryptocurrency insurance services to protect businesses and investors in the digital asset ecosystem.
Aon, a London-based insurance firm, claims to handle over 50 percent of the cryptocurrency investment market and is seeking additional protection for such clients.
With the advent of institutional investments in the cryptocurrency market, a robust crypto insurance market is not only required but instrumental to the success of the rising asset class.
Additionally, Marsh & McLennan said that 2018 had been “brisk” for crypto insurers, revealing that it formed its first-ever dedicated team to brokering policies for blockchain startups.
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