The guarantee of insurance to ensure protection against financial loss seems to be experienced using cryptocurrencies. Cryptocurrency-backed insurance plans are believed to be a benefactor in digital asset-based investments. From what is understood, health and life insurers are looking to instill ways to add blockchain in the insurance sector.
According to ConsenSys, a blockchain software company, intelligent contract-oriented transactions can apply different products to help under-insured markets. The company also stated that Ethereum smart contracts and decentralized applications (dApps) can provide insurance in an automated manner, along with tamper-proof audit trails. "I believe crypto insurance plays a role in supporting digital asset-based investments by mitigating risk, building trust, guarding against exchange-related vulnerabilities, and facilitating institutional adoption," Edul Patel, Co-Founder and CEO from Mudrex, a crypto. -investment platform, he told FE Blockchain.
Information from a survey conducted by Privacy Matters, an information provider, $4.3 billion worth of cryptocurrency hacks took place between January and November 2022. There was an increase of 37%, compared to cryptocurrency scams involving took place in 2021. As stated by Taxguru. in, an accounting and auditing firm, cryptocurrency-backed insurance can help protect investors against different frauds and Ponzi schemes. It has also been emphasized that the influence of cryptocurrencies in insurance can help infuse liquidity to businesses and individuals, and ensure safeguards against catastrophes, human error, and legal uncertainties.
โI believe that crypto insurance protects lenders against default or insolvency, minimizing losses from digital asset lending. In crypto, mutuals are replacing traditional insurance. This community-focused method can allow members to assess risks, vote on insurance claims, and obtain coverage,โ said Rajagopal Menon, vice president of WazirX, a cryptocurrency exchange.
As stated by Research and Markets, a market research shop, the global blockchain-backed insurance market may register $32.9 billion by 2031, at a compound annual growth rate (CAGR) of 52.4% between 2022-31. The platform also highlighted key contributors to this market such as SafeShare Global, Microsoft, Symbiont, IBM, Oracle, among others. Allied Market Research, a market research firm, stated that factors that may drive the cryptocurrency-backed insurance landscape include the adoption of technologically advanced software platforms, the rise in fraudulent insurance claims, and increased demand. of secure online platforms.
Furthermore, future predictions indicate that cryptocurrency insurance has a promising future as major financial companies are expected to apply institutional impact on it. As Deloitte, a professional services firm, stated, the need for an interoperable health record should drive stakeholder impact on cryptocurrency-based insurance plans, both in the short and long term.
