This week Nayms, the blockchain insurance marketplace, was granted regulatory approval in Bermuda. As its brand implies, the concept is inspired by the Lloyds insurance marketplace with an initial focus on providing insurance cover in the cryptocurrency space. In addition, it is launching a second offering, crypto-native captives.
Regulated blockchain insurance marketplace
As a regulated insurer, mainstream brokers such as Aon can participate in Nayms’ marketplace based on the Ethereum public blockchain. Hence Aon can do what it’s good at, sourcing and pricing risks. Nayms provides a marketplace to raise the capital needed for insurance contracts.
In most cases, mainstream underwriters might provide capital. But there’s also potential to attract new sources of money, with the peace of mind that knowledgable brokers like Aon are pricing the risk.
Much like Lloyds names commit capital, the Nayms insurance contracts lock crypto-asset funds in a smart contract. If it’s insuring a Bitcoin risk, then wrapped Bitcoin will be locked in a smart contract.
“We are thrilled to see the announcement that Nayms has graduated from the Bermuda Monetary Authority’s (BMA) sandbox in not one, but two licence classes,” said Bermuda Premier, David Burt. “Their Class F (Full) Digital Asset Business licence, and an Innovative Insurer General Business (IIGB) licence will allow Nayms to continue to expand their presence on Island, and demonstrate Bermuda’s capacity to serve as the jurisdiction of choice for innovative digital asset businesses.
At the same time, Nayms announced its new captive offering. Captive insurance is usually used by large companies that create a subsidiary to provide insurance to group companies. Today in the crypto space, it’s pretty standard for large blockchain protocols to set aside a treasury fund to be used in the case of a hack or if something goes wrong. Like most things in the crypto space, this is managed in a relatively informal manner.
Hence Nayms is launching a regulated captive offering that can hold the protocol’s native token to provide self-insurance. We’re guessing in the light of the demise of the Terra/Luna collapse, it will also support the treasury holding other tokens as well.
It has already signed up its first client, Qredo, a crypto startup that’s raised more than $100 million in venture funding.
In other blockchain insurance news, the charitable foundation linked to Lemonade will use a blockchain DAO (decentralized autonomous organization) for parametric climate insurance. DAOs are similar to co-operatives, and parametric insurance allows claims to settle automatically based on sensor readings without submitting a formal claim.
The two big enterprise blockchain consortia, B3i and RiskStream, are also partnering for parametric insurance.