It is no longer unusual to hear that a bank accepts savings in Bitcoin, Ethereum, and the like. Or that a loan company helps businesses with crypto. After all, the traditional financial and insurance industries were among the first to adopt cryptocurrencies. The latter ones have found more than one way to incorporate these means of payment into their business. This approach proved useful not only for companies but also for policyholders.
The above claim was confirmed by several recent surveys, including that of Goldman Sachs, which showed that 6% of respondents (over 300 financial executives in the insurance sector) verified that their companies invest in crypto.
Benefits for Policyholders and Insurance Companies
Several things make cryptocurrencies attractive, not only for insurance companies but also for policyholders. Some of them are beneficial to both parties, and some are specific.
So, when it comes to policyholders, they can expect several advantages of using crypto. One of the most notable is the opportunity for diversification. Thanks to crypto, they can get another asset (on top of the traditional ones) to add to their diversification strategy. By doing this, they can spread risk and keep their funds protected.
Also, policyholders can count on speedy transactions because crypto transactions are usually processed much faster than wire transfers. Receiving claim payouts on time in urgent situations is possible thanks to cryptocurrency.
We should also note that they get more privacy because they can stay pseudonymous.
On the other hand, insurance companies benefit from reduced transaction costs, faster settlements, improved security, and a few other things.
It’s one thing to discuss things in theory and another to see how they work in real life. Fortunately, there are many successful examples of insurance companies accepting crypto as a payment plan.
INGUARD is one of the leading digital insurance companies based in the U.S. It provides its services in all 50 U.S. States. What makes INGUARD truly special is that they were the first insurance companies in North America to accept Bitcoin payments in 2013.
Interestingly, this brand is partnered with numerous tech companies who share their vision for insurance, including Fitbit and Michelin.
Some insurance companies rely on the blockchain. Lemonade is an excellent example of this. This brand throws blockchain technology and artificial intelligence into the mix or provides pet, car, home, and other types of insurance. It goes without saying that policyholders can use cryptocurrency as a payment plan.
Compiling a list of insurance companies accepting crypto without mentioning AXA would be a mistake. This insurance provider comes from Switzerland. It was the first insurer in Switzerland (and among the first in Europe) to enable its customers to pay bills with Bitcoin. This move didn’t come as too much of a surprise, as their Hong Kong subsidiary was one of the first to enter the gaming virtual world by partnering up with The Sandbox metaverse developer, meaning the crypto-progressive incline was already there.
It’s worth noting that AXA works with Bitcoin Suisse (a cryptocurrency exchange) and Inapay (a mobile Bitcoin payment processor for mobile devices) to process the payments.
Next on the list, we have Metromile. This auto insurer was established in 2011 in California as a tech startup. Today, more than 100,000 drivers use Metromile for pay-per-mile car insurance, and many use cryptocurrency to pay for this. The good news is that policyholders can pay for various insurance premiums in Bitcoin and use it to claim payouts.
Premier Shield Insurance
From Massachusetts comes Premier Shield Insurance, an insurance agency focused on several sectors. From auto insurance and identity theft insurance to home insurance and various types of business insurance options – this company has its clients covered. The best part is that they can use crypto to cover agency fees and pay insurance premiums.
There’s a limit for paying in crypto set at $5,000. Also, another downside is that you can’t claim payouts in Bitcoin.
What to Expect in the Future?
Even though finding data on cryptocurrency and its use in the insurance sector is somewhat challenging, a thorough analysis will show you that these two are becoming closer than ever.
This makes sense because the use of cryptocurrency is growing. Dozens of countries across the globe have legalized this means of payment, and two of them have made it an official legal tender.
According to some market analysis, we should expect tremendous growth in the next few years. For instance, if the blockchain (crypto payments included) in the insurance market size was around 208 million dollars in 2020, it should reach 2.5 billion dollars by 2028, which is almost a tenfold rise.