AXA XL has partnered with insurtech firm Assurely on an insurance product for issuers and investors that safeguards new online capital formation strategies, including equity crowdfunding and security token offerings (STOs).
The product, called CrowdProtector, provides issuers protection against investor complaints and lawsuits, and communicates to investors that they may have their investment returned if an issuer misuses funds, misrepresents information, or steals money.
AXA XL and Assurely said that numerous crowdfunding portals have already signed on, including CryptoLaunch, Fundanna, Nvsted, Silicon Prairie, and TruCrowd, with a growing list of adopters to follow.
“We are excited to partner with Assurely and their technology-based underwriting of CrowdProtector policies,” said Dan Kumpf, Chief Underwriting Officer, Global Professional Lines at AXA XL.
“This solution demonstrates the value of insurance in helping opportunities move forward. New crowdfunding practices are proliferating today. Without proper coverage, millions are at risk,” he continued.
“Our work with Assurely is a great example of innovation in the industry. Collaboration between incumbents and innovative InsurTech startups such as Assurely, will yield a positive result for the industry and advance it as a whole.”
David Carpentier, Chief Executive Officer (CEO) at Assurely, also commented: “New economic markets, such as crowdfunding or online capital formation, create great new opportunities for the Main Street investor, but also pose new risks.”
“To combat new risks in new markets, investors look for a symbol of safety, validity, and trust. Online capital formation and crowdfunding – both equity and STOs – lack this symbol today,” Carpentier explained.
“This marketplace needs trust, safety, and confidence among both issuers and investors to thrive; something that regulations and funding portals alone may not completely satisfy.”
Ty Sagalow, President and Chief Insurance Officer at Assurely, added: “Economic and technological trends create new opportunities but also create new risks that traditional insurance is not well placed to address.
“The adaptability of CrowdProtector is a great example of the future of insurance. Heavily focusing on our technology, we have been able to increase underwriting, adapt a new product to fit the need of an exciting new industry, and deliver the entire solution in a frictionless manner. Our underwriting and distribution process is application-free, completely instantaneous, and automated for the end user.”