South Korea To Have Insurance For Crypto Exchange HackingSeptember 7, 2018
A South Korean news outlet has reported that a local major insurance company will begin to provide Cryptocurrency exchanges with insurance that covers losses that come because of hackings. Despite various insurance companies working with exchanges in the country, none of them covers hacking damages. Hanwha Insurance will start providing the new coverage this month. The new product will help in boosting investors’ confidence in the emerging technology and help in bringing stability.
Hanwha Insurance To Introduce A New Product
Hanwha Insurance has announced plans to introduce a new cyber insurance product that will see local exchanges get compensated in case of hacking damages. According to the local media, the new product will be introduced before the end of this month.
The Asia Times reported that although Cryptocurrency exchanges in South Korea have joined cyber insurance, they don’t get coverage for hacking. Nevertheless, the new product has been hailed as it will see the exchanges get compensated when they incur losses due to hacking activities.
The news outlet overheard Hanwha Insurance saying that from next month, they will begin negotiating with the exchanges at an individual level. The insurer has revealed that the process will require coordination as exchanges have to wait for the insurance and reinsurance firms to meet and discuss the issue.
Hacking Insurance Market
Cryptocurrency is one of the fastest growing industries, and businesses such as exchanges handle digital assets worth billions of dollars making them a target for hackers. Consequently, such businesses need coverage so that they remain operational even in case of such attacks. Many Cryptocurrency exchanges in South Korea have been waiting for this new product for a long time.
Exchanges in Seoul are consumers of insurance products. Bithumb, one of the largest Crypto exchanges in the country has two insurance policies. According to CBC New, the two companies Heungkuk Fire & Marine Insurance Co. and Hyundai Marine & Fire Insurance Co. do not cover hacking losses.
The news outlet reported that the two insurance companies cover the loss of investor’s personal information, cyber threats, and data loss. The coverage also includes violation of information maintenance. Consequently, the new product will be a major relief to the exchanges as it covers areas not covered by the other insurers. However, Hanwha Insurance has to ensure it provides sufficient compensation and that the premium reasonable to attract more exchanges.
Insurers Reluctant To Accept Crypto Firms
Most insurance companies in South Korea are wary of the Cryptocurrency industry and are reluctant to provide insurance services to businesses in the industry. A report on Business Korea in June said that Korea Blockchain Association was meeting with various insurers to discuss the provision of insurance services to Cryptocurrency exchanges in the country.
Korea Blockchain Association is a group that brings together 23 Cryptocurrency exchanges in the country. The association is determined to do everything possible to see more insurance companies develop products for Crypto-based firms. The introduction of more insurance products for Cryptocurrency exchanges and the entire industry at large will be of major benefits to the companies and their customers as it will give investors and consumers assurance.