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Reinsurance News

Coinbase & Aon exploring plans to set up captive crypto insurer

11th July 2019 - Author: Matt Sheehan

Coinbase, a San Francisco-based digital currency exchange, is exploring plans to set up its own captive insurance company with the help of re/insurance broker Aon, according to reports from coindesk.

crypto-currencyThe company would insure risks related to crypto-currencies, an area Aon took its first steps in earlier this year via the establishment of captive companies in the Cayman Islands.

Insurance for crypto currently remains scarce, with major exchanges such as Kraken and Huobi opting to self-insurance by setting aside coins to cover losses from thefts or hacks.

Industry sources told coindesk that Coinbase and Aon believe a captive structure could address this shortage by helping firms to access coverage at more reasonable prices.

Aon said that a handful of its crypto clients are also considering a captive option, with Bermuda and some U.S on-shore domiciles expected to follow the Caymans soon.

“There is a lack of capacity and some are uncomfortable with what is available in the marketplace and are looking to alternative solutions,” Jacqueline Quintal, Managing Director and Financial Institutions Practice Leader at Aon told coindesk.

“I think the path for most will be to buy some amount of traditional insurance first and then to explore alternative structures, potentially including a captive — and we are having more and more of these conversations.”

This will not be the first time Coinbase and Aon have worked together, as back in April the broker helped to arrange about $255 million in coverage for Coinbase’s hot wallets.

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