Guest blog, Joe Carstairs, Blockchain copy writer
At the start of 2020, I read this blog introducing Nayms, the company that is building a platform to let you provide crypto-denominated insurance against crypto losses, thereby solving what it refers to as the ‘cryptocurrency insurance problem’.
As a blockchain copywriter, who worked on digital strategy for insurance clients in a previous role, the crossover between the new world of crypto and the old world of insurance has interested me for some time.
So, when I saw that Insurtech Gateway was hosting a crypto insurance event (which, frankly, you don’t see a lot), I was keen to find out more.
“Crypto is here to stay”
According to Stephen Brittain, Co-Founder of the Gateway, it is the opportunities provided by this mix of established and innovative industries that really excite him.
“We believe that crypto is here to stay and it’s going to have a major impact on the insurance sector. The Gateway is the world’s first FCA authorised incubator with insurance binders and a fund, which means that we have the capabilities to live-test crypto concepts on the outside of large insurance companies. We believe in testing big ideas in a small way”
The event was a chance for crypto entrepreneurs who might know nothing about insurance to mingle with insurance veterans who may only now be starting to consider the potential of these digital assets. For all this latent possibility though, is there actually any real interest in cryptocurrencies amongst insurers?
“Supply was very constrained two to three years ago, but there is no doubt that more comprehensive insurance coverage programs now exist for cryptocurrency custody providers and others in the space. We expect the market to continue to expand and grow more sophisticated as established financial institutions look at providing crypto related services alongside established accounts and products,” he said.
According to his colleague, Peter McBurney, Head of Technology Consulting, the most obvious and urgent crypto insurance opportunities exist in the area of custody.
“There is currently a great deal of innovation underway in technologies and processes for secure custody of digital assets, with no one approach dominant as yet. Consequently, proposed solutions for custody need to be considered case-by-case and within their specific application contexts. This makes the digital custody space an exciting one to be a participant in at present,” he said
“With the future potential to lock any tokenised asset within the Maker Protocol and borrow a stable digital currency, the potential options for insurance are huge – including alternative options for finance, reinsurance and even earning better returns on existing capital. The insurance sector as a whole is certainly entering a new digital revolution and this is just the very start,” he said.
James Anson, Ethereum London Organiser, agrees.
“I think this is the perfect time for the insurance industry to be looking at the blockchain world. Now there’s real world applications in the wild like MakerDAO, it’s easier to see the future vision of the builders,” he said.
The seed of insurance disruption?
Innovation and disruption are built on action not just ideas and the event introduced us to two crypto insurance startups that have clearly developed beyond a moment of inspiration.
The name that first drew me to this event was, well, Nayms. On the night, its co-founder Dan Roberts spoke about the idea behind the business and the opportunity he saw, as well as the support the Gateway has provided.
“There are a number of factors required in building a successful company. This much we know. Unfortunately, when launching new products into new markets we don’t always know what these factors are. Insurtech Gateway provides Nayms with a certain level of confidence that we’re giving this exciting new project the opportunity to become a success and we look forward to seeing what new start-ups the great Gateway team work with,” he said.
Throughout the evening, there seemed to be a seed of hope that we might be at the start of something big. Paul Gordon, a veteran of the London crypto scene who founded Coinscrum, agreed that the event was a great way to kick off interest on both sides.
“Having hosted crypto and blockchain events myself for over seven years, it was refreshing to attend the Insurtech Gateway networking event last week to get an excellent lowdown on this important and necessary vertical within the industry. Naturally there will be differing specific requirements for the various participants requiring insurance across the spectrum but the Nayms project was particularly interesting – both in terms of their technical approach and also their vision for tackling the problem of correctly and efficiently pricing risk for digitally-native assets,” he said.
Another Insurtech Gateway portfolio company that presented on the night was Coincover. Its co-founder, David Janczewski, explained how his company was building its product around the trust and safety issues that exist in crypto, which make insurance-related propositions so exciting right now.
“When Coincover first joined the Gateway back in 2018 we came with an embryonic idea to truly solve some of the fundamental issues within the cryptocurrency space; safety and trust. The experienced team helped us shape, and build our unique cryptocurrency insurance offer. Today, we are the first and only company to offer insurance for cryptocurrency assets at the individual customer account level, which is huge! It means we can now help businesses which are already in, or plan on getting into, the cryptocurrency markets a totally safe and secure means by which to offer these new digital assets to their customers,” he said.
The start of an exciting journey
Hearing from Nayms and Coincover really brought home how a crypto insurance scene is more than just an idea. However, as Stephen Brittain suggests, there is still some way to go.
“My talk centred around the moment of polite rejection or bemusement that comes from pitching truly disruptive ideas. The ‘interesting’ response. The mission of the Gateway is to break down this (entirely natural) response and provide an opportunity to demystify, explore and evaluate these opportunities to eventually determine the best timing and place to begin,” he said.
“Insurtech Gateway’s event featured several exciting companies that are seeking to harness the true potential of smart-contracts, which will completely change the insurance markets and how institutions think about risk transfer. I am impressed at the level of commitment the incubator has to the companies under its wing and the lengths it goes to make them a success,” he said.
If you are a crypto expert or entrepreneur who is interested in finding out more about insurance, or an insurance professional ready to champion crypto or collaborate on projects, please get in touch with the Gateway for a no strings attached chat.