It is no longer uncommon to hear that a bank accepts savings in Bitcoin, Ethereum, etc. Or that a lending company helps businesses with crypto. After all, the traditional finance and insurance industries were among the first to adopt cryptocurrencies. They have found more than one way to integrate these payment methods into their activity. This approach has proven useful not only for businesses but also for policyholders.
The above assertion has been confirmed by several recent surveys, including that of Goldman Sachswhich showed that 6% of respondents (over 300 finance executives in the insurance industry) verified that their company was investing in crypto.
Benefits for policyholders and insurance companies
Several elements make cryptocurrencies attractive, not only for insurance companies but also for policyholders. Some of them are beneficial to both parties, while others are specific.
Thus, policyholders can expect several benefits from using crypto. One of the most notable is the possibility of diversification. Thanks to cryptocurrencies, they can obtain another asset (in addition to traditional assets) to add to their diversification strategy. By doing so, they can spread risks and protect their funds.
Additionally, policyholders can count on fast transactions, as crypto transactions are typically processed much faster than wire transfers. Receiving claims payments on time in emergency situations is possible thanks to cryptocurrency.
It’s also worth noting that they have more privacy because they can remain pseudonymous.
On the other hand, insurance companies enjoy lower transaction costs, faster settlements, improved security, and a few other benefits.
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 a leading digital insurance company based in the United States. It provides its services in all 50 US states. What makes INGUARD truly special is that they were the first insurance companies in North America to accepting Bitcoin payments in 2013.
Interestingly, this brand partners with many tech companies that share their vision of insurance, including Fitbit and Michelin.
Some insurance companies rely on blockchain. Lemonade is a great example. This brand integrates blockchain technology and artificial intelligence or offers insurance for pets, cars, homes and others. It goes without saying that policyholders can use cryptocurrency as a payment plan.
Compiling a list of insurance companies accept crypto without mentioning AXA would be a mistake. This insurer is from Switzerland. It was the first insurer in Switzerland (and among the first in Europe) to allow its customers to pay their bills with Bitcoin. This decision is not really a surprise since their Hong Kong subsidiary was one of the first to enter THE virtual gaming world by partnering with metaverse developer The Sandbox, meaning the crypto-progressive tilt was already there.
It is worth noting that AXA works with Bitcoin Suisse (a cryptocurrency exchange) and Inapay (a Bitcoin mobile payment processor for mobile devices) to process payments.
Next on the list we have Metromile. This auto insurer was founded in 2011 in California as a technology startup. Today, more than 100,000 drivers use Metromile for per-mile car insurance, and many use cryptocurrency to pay for it. The good news is that policyholders can pay various insurance premiums in Bitcoin and use them to claim payments.
Premier Shield Insurance
From Massachusetts comes Premier Shield Insurance, an insurance agency focused on multiple industries. From auto insurance and identity theft insurance to home insurance and various types of commercial insurance options, this company has its customers covered. The best part is that they can use crypto to cover agency fees and pay insurance premiums.
There is a limit for paying in cryptocurrency set at $5,000. Also, another disadvantage is that you cannot claim payments in Bitcoin.
What to expect in the future?
Although it is somewhat difficult to find data on cryptocurrencies and their use in the insurance industry, a deeper analysis will show you that these two are closer than ever.
This makes sense because the use of cryptocurrencies is growing. Dozens of countries around the world have legalized this means of payment, and two of them have made it official legal tender.
According to some market analyses, we should expect considerable growth over the next few years. For example, if the size of blockchain (including crypto payments) in the insurance market was around $208 million in 2020, it is expected to reach $2.5 billion by 2028which represents almost a tenfold increase.