Ever since the emergence and success of Bitcoin, the first cryptocurrency to effectively utilize Blockchain Technology, there has been significant growth in the crypto space. These second responders to the evolving Blockchain technology “Altcoins” as we call them, have been the significant catalyst fuelling the crypto revolution.
Although we can say that the global adoption of cryptocurrency and the crypto revolution is still in its infancy, one thing is for sure; Blockchain Technology which is the foundation of cryptos is here to stay.
Cryptography and Cryptocurrencies as we know them are bound to change the financial industry for good and as such the insurance sector isn’t left out.
Unfortunately, the challenge faced by Bitcoin and other cryptos is the ability to serve as a safe haven for fraudulent activities. This gives insurance issuers doubts about protecting cryptocurrency users. In addition, the level of volatile, and understanding how cryptocurrencies like Bitcoin fluctuates is a problem. However, this can be effectively checked when there are mass adoption and the emergence of a matured market.
A case study of the Cyberattack on 11th February 2018 is one to look at. Four thousand websites gave hackers access to computing power from affected computers which was used to mine a coin called Monero. Ideally, cyber insurance schemes are designed to protect against data breaches and theft. This system may struggle to accommodate claims like these.
Evidently, the crypto revolution has exposed some loopholes in the Cyber insurance industry. It remains to be seen how issuer companies react to it.
Henry Warner a cyber-broker operating in London says, “Rather than be negative, this could be seen as a good opportunity for the insurance market to innovate and evolve with the new and persistent threats. This will give potential purchasers the confidence in the product and continue the sustained growth in the market.”
The existence of cryptocurrency and Blockchain will serve as a significant turning point for cyber insurance. More businesses will begin to understand its relevance and ultimately, the need for cyber cover.