More and more Bitcoin businesses are adopting mainstream practices and seeking insurance for their operations. A report by top insurance market operator Lloyd’s, published on June 12 and targeted at insurance service providers, highlights the key risk factors for the insurance of Bitcoin operations.
Lloyd’s, an insurance market located in London, is one of the best-known names in the insurance sector. It operates as a marketplace within which multiple financial backers come together to pool and spread risk. Lloyd’s itself does not underwrite insurance business, leaving that to its members. Instead, the society operates as a market regulator, setting rules under which members operate and offering expert advice and centralized administrative services to members.
The report suggests that the technology, procedures and practices that underpin Bitcoin are maturing. “Nevertheless, legitimate concerns remain over security risk and the potential for criminal exploitation,” notes the report. Lloyd’s does not, therefore, endorse the insurance of Bitcoin operations, but rather “aims to contribute to the assessment of these risks for insurance purposes.”
Lloyd’s shares a positive assessment of the benefits of Bitcoin, now widespread in the mainstream financial sector.
“In essence, Bitcoin offers a low-cost, relatively fast means to transfer value