Prestigious insurance marketplace Lloyd’s of London has begun supporting cryptocurrency insurance for the first time, despite remaining quiet on the details.
The news broke with an announcement from Kingdom Trust, which holds over 30 cryptocurrencies in secure storage, that it was expanding its offering to include cryptocurrency insurance, to be underwritten in the Lloyd’s market.
Kingdom Trust is a qualified custodian, enabling them to hold onto cryptocurrency deposits and private keys on behalf of institutional investors. The insurance cover is seen as another significant step towards more mainstream financial support for cryptocurrencies and institutions investing in them.
Kingdom Trust CEO Matt Jennings said the insurance tied in with the services they already provide to regulated institutions, noting, “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.”
Lloyd’s has refused to confirm whether the insurance is related to theft cover, nor any of the insurance syndicates involved in underwriting the risk. It follows from a directive issued to syndicate members in the last few weeks, warning of the risks in underwriting cryptocurrency cover.
The insurance cover was arranged for Kingdom Trust by a firm called Safe Deposit Box Insurance Coverage (SDIC). SDIC president Jerry Pluard said there was evidence the conservative insurance market was warming up to cryptocurrency.
“About 10 syndicates in Lloyd’s have indicated a willingness and are somewhat active in evaluating crypto exposures. 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,” Pluard said.
The development marks one of the first significant shifts for the traditional insurance world towards providing cryptocurrency cover, a crucial service for large banks and institutional investors deploying capital in the cryptocurrency markets.
With brokers like SDIC already optimistic about the uptake amongst syndicates, it looks like an important market for institutional scale cryptocurrency underwriting could be emerging.