As cryptocurrencies gain widespread popularity, there has been a corresponding rise in crypto fraud. To safeguard their digital assets, many individuals are now considering crypto insurance. According to a GlobalData poll, there is growing interest among consumers in purchasing insurance policies for their cryptocurrency wallets. As the momentum in the crypto market persists, demand for these insurance policies is likely to grow.
A GlobalData poll conducted on Verdict Media sites in Q2 2024 found that 44% of respondents are interested in purchasing insurance for their cryptocurrency wallets. Historically, insurers have been hesitant to offer coverage for cryptocurrencies due to market volatility. However, amid increasing demand and adoption, insurers will need to develop solutions to address this emerging need.
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As Bitcoin reaches unprecedented heights, cryptocurrency investments are gaining popularity. However, the absence of financial intermediaries in these transactions increases the risk of fraud and theft. A 2024 Reuters article reported a 45% rise in losses from crypto scams in 2023, with expectations of further increases in 2024, underscoring the essential need for protective measures. To address this issue, insurtech M2 Recovery has launched a new insurance policy. In collaboration with Lloyd’s of London and broker McGill and Partners, it aims to help individuals recover stolen digital assets through after-the-event legal expenses insurance, building on its existing crypto insurance offerings. M2 aims to combat this type of fraud by collaborating with a specialised team comprising cyber intelligence experts, recovery agents, forensic investigators, and skilled lawyers.
As reported by Reuters, cryptocurrency scams totalled over $5.6bn in 2023, highlighting the significant financial stakes in this expanding sector. As a result, the insurance industry has a crucial role to play, which is highlighted by the growing interest in insurance policies for cryptocurrency wallets. This presents a substantial opportunity to develop solutions that protect customers.
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