Aon  |  Financial Institutions Practice
Cryptocurrencies, Other Digital Assets & Blockchain

Financial institutions, both traditional and newly formed, are increasingly entering the digital asset and blockchain space, with particular focus on cryptocurrency. This is driven by customer demand and ongoing pressure to reduce costs, such as in the payment space where stablecoins are emerging as a low-cost alternative to legacy systems.

Digital assets and cryptocurrencies are perceived to have heightened exposures including: regulatory uncertainty; theft of corporate or customer assets; high volatility; limited loss history data; etc. These unique exposures require innovative risk-transfer solutions.

Key solutions and capabilities for digital assets and blockchain include:

  • Crime and Specie Insurance, for the theft of digital assets
  • Directors & Officers Liability
  • Cyber Liability Insurance
  • Professional Liability Insurance (E&O), including Staking and Smart Contract Insurance

Captives: firms can access captives in strategic locations across the world – including a captive to hold cryptocurrency as an investment class to hedge crypto/fiat price exposure – alongside management templates designed for regulatory compliance.

Actuarial modeling: actuarial teams conduct forecasting analyses of cryptocurrency crime program loss frequency and severity for both hot and cold wallets, to help firms quantify their loss exposure in different insured or retained loss layers.

Penetration testing: a variety of security testing services such as dynamic application testing, secure code review, network penetration testing, cloud configuration review, and threat modeling enable experts to perform penetration testing of cryptocurrency wallets and custody solutions, including those utilizing multi-signature schemes and multi-party computation, custom blockchain solutions, applications, and smart contracts.

Due diligence and investigative research: enables firms to navigate the digital asset space by researching the creators of cryptocurrencies, digital assets and blockchain technologies to help avoid fraud and reputational damage during acquisitions, private equity investments, and other transactions.

Digital asset and blockchain solutions are available to: banks, trust companies and exchanges; broker/dealers; cryptocurrency miners; investment managers and advisors; emerging blockchain technology companies; and others.