Banking companies have made serious inroads into the cryptocurrency business, several of them recognizing that a mixture of both fiat and crypto is the path to the future.
Lloyds was the latest institution to take a more serious look at digital assets, with the bank focusing on improving the security of users of cryptocurrencies.
Lloyd’s recently launched its own insurance policy to protect assets held in hot wallets from bad actors and malicious hacks.
Sources close to the organization have stated that security has become a big concern in the space and as time progressed, the damage was only increasing. To combat this, Atrium, the syndicate of the Lloyd empire decided to work on an all-inclusive safety feature.
The development of the feature was done in partnership with Coin cover with an aim to curb cryptocurrency thefts on hot wallets.
Flexible insurance policy limits start from as little as 1,000 pounds and will act as a liability insurance policy. The strategy will have a dynamic cap that will fluctuate with the increase in cryptocurrency prices.
This feature allows the consumer to always be paid for the basic value of a particular asset, even if it changes during the policy period.
Post the announcement, Matthew Greaves, the Underwriter at Atrium said:
“There is a growing demand for insurance that can protect cryptocurrency as it becomes increasingly popular. It is a testament to Lloyd’s that the market has put together an innovative solution to mitigate these new risks and protect against theft – from physical as well as online vaults – thereby providing customers with piece of mind that their assets are safe.”
Lloyd’s policy and idea were backed by multiple insurers who have been working with the bank for some time now. The insurers included TMK and Markel who are members of Lloyd’s Product Innovation Facility [PIF].
The launch was also targetted to achieve the coveted position of being the foremost digital platform that cares for its users. Lloyds took the initiative to build the insurance policy because as more money flows in the crypto market, there was an increase in hacks and scams.
The Product Innovation Facility is an important step towards building a marketplace that offers better value for multiple use cases in today’s world.
This is not the first time the PIF has backed the insurance product, as it did for the first time back in September. The initial solution used a parametric mechanism to automatically reimburse customers for unforeseen events.
Dan Janczewski, the CEO of Coincover also had a few words to say about the latest partnership. He believed that the timing was right because a lot of were jumping into the cryptocurrency industry in 2020.
Janczewski claimed that the latest policy was another step in the right direction for cryptocurrency adoption. Lloyd’s Product Innovation Facility has a capacity of $170 million and an Underwriter staff of 27.