Survey suggests blockchain held back by lack of insurance

Insurance executives believe that further development of blockchain and cryptoassets is being held back by the lack of an insurance market for such risks, according to a survey by Evertas.

The cryptoasset insurer found that 55% of respondents feel companies are holding back on new blockchain initiatives and cryptoassets because they cannot get insurance cover.

Some 87% of insurance executives said directors and senior executives are at risk of being sued if their firms suffer losses or thefts linked to blockchain or cryptoasset work not covered by insurance.

Meanwhile, only 20% of insurance executives said firms developing blockchain and cryptoassets are effectively assessing the risks. Some 35% said there was a high chance of a cryptoasset or blockchain related insurance claim being rejected.

Raymond Zenkich, president and COO of Evertas, said: “Cryptoassets are increasingly becoming mainstream. This trend will be further fuelled by more traditional and illiquid assets being tokenised, making it easier to trade and invest in them.

“There is increased use of smart contracts for owners and investors in these assets to interact with counterparties, and increased acceptance of blockchain as core infrastructure across industries to record ownership, provide an audit trail, and unlock completely different business processes and applications. However, for this market to really reach its full potential, it must be supported by a viable insurance market,” he added.