Munich Re, Sompo back new cover for blockchain contracts

18 July 2022

Bermuda-based Chainproof has launched this month and says it is the world’s first regulated “smart contract” insurer, backed by investment from Sompo Insurance and reinsurance backing from Munich Re.

Chainproof covers contracts that use public, decentralised blockchains. It offers policies to institutional investors who are end-users of decentralised applications, non-fungible tokens (NFTs) and other smart contracts.

The insurance policy is bundled with a real-time monitoring and alerting service, alerting the policyholder in the case of a hack to minimise losses.

It says Decentralised Finance (DeFi) is rapidly growing but traditional insurers “generally lack the historical data and technical expertise required to properly underwrite insurance related to smart contracts”.

“As asset managers continue to seek credible solutions to protect the growing crypto portion of their portfolio, the lack of regulated insurance has kept DeFi from achieving mainstream adoption,” Chainproof said.

CEO Sebastian Banescu says Chainproof is a “must-have for institutional investors who want to navigate the DeFi space safely” and he is “honoured to have been trusted” by Sompo and Munch Re.

Sompo Light Vortex CEO Koichi Narasaki says Chainproof represents the “leading-edge of regulated insurance solutions for the groundbreaking world of Web3″ while Munich Re Head of New Tech Underwriting Andre Knoerchen says institutional investors will be further enabled to succeed in the DeFi sector if they are covered by regulated insurance, which “we support through reinsurance”.

Chainproof is a subsidiary of Quantstamp.