We were thrilled to be on the Innovation Stage at The Insurance Network London Market Conference earlier this week to talk about digital assets trends and technologies driving decentralized finance applications, and the relevance to the insurance sector.
Whilst the topic might seem far removed from day to day insurance operations, it is going to become increasingly important – both from the perspective of the sector taking risk onto its balance sheet; and to how it participates in a decentralized world.
We are already seeing traditional segments such as the Specie market offer cover for private keys, alongside new digital native start-ups offering new 'non-insurance' protection such as cover for failure of smart contracts, just to name two examples. At the same time major insurance carriers are buying land in the Metaverse, providing immersive moments that matter for their customers and employees, enhancing their global brands.
The insurance sector will need to continue to assess the risks and opportunities and respond to the growing trends in the digital assets, DeFi and Web3 space.
Here's our take on some of the trends identified:
As with all emerging technologies considered analysis is required of the different markets, technologies and associated risks in order to take full advantage of the opportunities they present. What is clear is that there appears to be a decoupling of the perceptions around the risky crypto plays and associated root causes, from the broader sentiment of the incredible potential afforded by decentralized systems, digital assets and tokenization, enabled by Web3 technologies.
With thanks to Professor Peter McBurney for contributing to this article.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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