# Crypto Insurance - Feasible or Not?

**Published by:** [jelca thinks](https://paragraph.com/@jess/)
**Published on:** 2022-05-15
**Categories:** insurtech
**URL:** https://paragraph.com/@jess/crypto-insurance

## Content

Everyone seems excited about crypto / web3 insurance just as everyone is excited about any area that has white space. Thoughts and thesis below.spectrum of insurance - from Defi on the left to centralized on the rightdecentralizedexample companies: Nexus Mutual, Unflashed, NaymsUsually protocol level work, insurance by collective investmentoften seen via smart contractsPros: good at getting to high limits quickly and at a good price, easier to underwrite, often instant payoutsCons: very niche, hard to do D&O, cyber, etc.centralizedexample companies: Realm, Sompo, Superscript, Axis, Relm, Coincoverbigger ones will write crypto insurance risk in a more traditional wayPros: More extensive diligence and process, increasing internal buy-in and interestCons: hard to get to high limits due to diligence and data requirementsservice providersusually doesn't provide covermore for getting insurance industry comfortableMay have heard of Breach - more in the middle as they insure crypto on exchangesbiggest obstacles for crypto insurance / is there appetite?need internal buy-in --> increasing but not there yethuge education aspect in the spaceESG fanatics who think bitcoin is ruining our planetbitcoin is a ponzi schemevery little loss history --> hard to underwritethose likely to purchase crypto insurance (businesses) are later stage e.g. chainalysisyears ago, crypto insurance was very expensive and less understoodwhat to keep in mind when investing in this spacefew competitive advantages - very few players in generalany capacity provider will probably stand out because they're willing to take on crypto risk and figure it outlittle innovation thus far. market is still small.seeing more insurance people move into the space versus tech-firstneed API integration / technological user friendlylonger term view of where the space is goingconsolidation with other insurtechs and insurance companies like cyberconsolidation with other tech companies in blockchain analytics, KYC, AML, etc (chainalysis, Merkle, elliptic)likely there will be price war and margin compression as more enter the space and undercut each other

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