According to local South Korean media, a major South Korean insurance company will supposedly begin offering cryptocurrency exchanges insurance aimed at compensating for damages caused by hacking. At the moment, few crypto exchanges in the country are insured and hacking damages are not covered. The insurance firm here being referred to is Hanwha Insurance. Hanwha Insurance is the second largest insurance company In South Korean with assets of 81 trillion won as of November 2013.
This major South Korean insurance company is reportedly introducing a new type of cyber insurance product this month aimed at providing compensation for hacking damages of domestic crypto exchanges. This was reported by local media outlets last week. The Asia Times reported that “Cyber insurance, which crypto exchanges have joined in the past, is a compensation for the leakage of personal information, but the new product also compensates for the damage caused by hacking.”
Hanwha Insurance was citied disclosing that they “plan to start negotiations with individual exchanges for insurance from next month.” Nonetheless, the firm also added that “even if the exchange wants to join, it will require much coordination, as the insurance and reinsurance companies need to meet in order to get insurance.” The publication noted, “exchanges may be reluctant to take out insurance if sufficient compensation is not provided or the premium is too high.”
Since the hacking of Bithumb and Coinrail back in June, the demand for insurance coverage for hacking damages has been growing in South Korean. However, Bithumb already has two insurance policies, one with Heungkuk Fire & Marine Insurance Co. and the other with Hyundai Marine & Fire Insurance Co… CBC News noted that they do not account for hacking damages, adding “Bithumb has two cyber comprehensive insurance policies covering violation of information maintenance, data loss and theft, cyber threats, and compensation for investor personal information leakage.”
Back in June, Business Korea, a news publication reported that the Korean Blockchain Association was in talks with Hyundai Marine & Fire Insurance Co. and Hanwha General Insurance Co. over how to provide insurance coverage for crypto exchanges of any size.
In addition to that, the publication elaborated that “The association has been continuously holding negotiations with insurers from April on behalf of its member exchanges. This is because insurance companies are reluctant to accept cryptocurrency exchanges as their policyholders due to their credibility and security issues.”
This association mentioned above has up to 23 members which are crypto exchanges. This includes four of the country’s largest, namely; Upbit, Bithumb, Coinone, and Korbit. They already have insurance but the coverage numbers are low.