The insurer is focused on covering institutional holders of cryptoassets, which include exchanges, custodians, traditional financial institutions, funds, family offices and ultra-high net worth individuals.
Chicago-based Evertas says it is the world’s first cryptoasset insurance company. In February 2020, the company rebranded from BlockRe, which was founded in 2017. The company received a license from the Bermuda Monetary Authority to start operating from the jurisdiction last June.
Evertas has developed an underwriting framework for crypto (including blockchain/distributed ledger technology systems) and also offers claims handling and risk management processes in what it calls a full lifecycle insurance product for crypto.
Due to the highly specialized nature of underwriting the risk associated with cryptoassets, there are few insurers currently operating in this sector.
The initial policies from Evertas covered the loss and theft of private keys representing the ownership of cryptoassets. These types of losses can result from physical theft, cyber attacks/hacks, social engineering and natural disasters. It is also offering technology errors and omissions, cyber, property, kidnap and ransom, directors and officers coverages.
It also provides underwriting, claims, policy design and other services to traditional insurance carriers as well as captive insurance companies that are operating in the crypto space or looking to enter.
Raymond Zenkich, president and founder, said Evertas has seen increasing demand as institutional and regulated entities enter the space, creating a multi-billion-dollar opportunity.
PayPal, the Sacramento Kings and Microstrategy recently announced plans to accept or use crypto in certain payments. S&P Dow Jones has launched three three cryptoasset indices.
Zenkich says there is a multi-trillion dollar crypto market and less than $5 billion in total insurance capacity.
The funding round was led by Morgan Creek Digital, CMT, HashKey, Wave Partners, RenGen, 4RC, Centrality, Plug ‘n Play, Vy Capital, and a number of individual investors including James Slazas (CEO of VaultLink), Tyler Ward (founder of BarnBridge), Quinn Abrahams (partner of D64), Shy Datika (founder of INX), and Sandra Ro (CEO of Global Blockchain Business Council and former head of Digitization at CME Group).
Morgan Creek CEO Mark Yusko said the cryptoasset ecosystem will evolve more rapidly with an insurance infrastructure. “Moreover, institutional and retail adoption, as well as regulatory acceptance, depends on the presence of a viable insurance market, and we anticipate Evertas to be a leader in that development,” he said.
Deng Chao, CEO of Hashkey Capital, added that “insurance is nearly a must-have for institutional investors in the crypto space.”
Source: Insurance Journal
