Crypto confidence: How can the London Market demystify digital asset insurance?

The digital asset market has experienced explosive growth, with its market capitalisation soaring from approximately $14 billion in 2016 to around $1.6 trillion in 2024. This remarkable rise indicates not only the growing acceptance of digital assets but also the urgent need for specialised insurance solutions tailored to the unique risks associated with them. Digital assets, including cryptocurrencies, non-fungible tokens (NFTs), and digital tokens, present unique challenges that traditional insurance products often fail to address. Lost private keys render assets inaccessible forever, and approximately 3.8 million Bitcoin has been permanently lost. This highlights the critical need for comprehensive insurance coverage to protect against such risks.

The insurance market for digital assets is still in its infancy, with an estimated gross written premium (GWP) ranging between $150 million to $300 million as of 2024. As we move forward, the potential for growth is substantial, especially as digital asset businesses seek insurance not only for compliance but also to enhance their credibility with clients and investors.

Learning objectives:

• Why digital assets are important for the London Market
• What are the insurance needs of digital asset companies
• How can the London Market step up to meet these needs and stay relevant within the global insurance industry