Untapped Opportunities in Crypto Markets
Whether it is automated registration, utilizing information from user’s social media profiles, or automated claims and settlements being managed in real time, each of these new applications cannot only improve the customer’s experience, but can also drive further penetration of insurance, by simplifying access.
The Crypto/Defi Asset space is growing in leaps and bounds but we are yet to see any real insurance providers build insurance solution around this rapidly growing industry.
A growing concern of crypto users and governments worldwide to encourage rapid adoption is the lack of safety net insurance products to protect the mass market. We are going to bring that change.
Further, cryptocurrency enthusiasts have been shown to skew towards highly educated, tech-savvy, and future-oriented demographics (“How Many People,” 2018). Blockchain and cryptocurrency enthusiasts are a consumer demographic which is perfectly pre-filtered for the insurance market and whose make-up helps transcend many of the difficulties in consumer acquisition and marketing outreach.
Blockchain and cryptocurrency enthusiasts are also highly-invested in the adoption of cryptocurrencies in mainstream business activity. Their emotional investment in the success of cryptocurrencies, which is often based on staunchly-held shared world-views such as libertarianism, can supersede a typical person’s inclination to follow the path of least resistance.
Because of their dedication to the growth of the ecosystem, cryptocurrency enthusiasts typically form com- munities where they interact with others who share similar values. These communities usually have open-lines of communication with the businesses they support, and knowledge exchange is expected
The crypto sector badly needs risk transfer solutions, including traditional insurance, and this goes beyond protection from hackers and thieves. It is no secret that the crypto world suffers from continued price volatility and that users could benefit from some protection against market gyrations — whether through traditional insurance carriers or by other means.
The volatility of cryptocurrency prices also contributes to insufficient insurance coverage in the industry. In January of last year, data from coinmarketcap showed that the total market capitalization of the cryptocurrency industry was valued at over $800 billion, while currently it is fluctuating at just over the $300 billion mark. Volatility affects the valuation of insurance premiums, thus limiting the number of coins that can be insured in case of a hack.
Broad market trends are revealing that now is the time to undertake decentralized initiatives. The trajectory of the digital age is showing us users are moving away from fully centralized platforms (Web 1.0) to new alternatives. Centralized peer-to-peer marketplaces (Web 2.0) have witnessed rapid growth over the past decade, but these too are showing signs of user dissatisfaction brought on by market inefficiencies. The next stage of digital growth will come from fully-decentralized peer-to- peer ecosystems (Web 3.0).
PolkaCover’s platform will be uniquely positioned to bypass the traditionally long and expensive consumer acquisition journey by tapping directly into a consumer demographic which is willing to go above-and-beyond to contribute to the success of the business itself. Secondly, our strategy to convert a demographic unfamiliar with blockchain technology into loyal users represents a significant untapped opportunity.