What is Crypto Wallet Insurance, and How Does It Work?

White-Label Insurance Crypto Insurance Embedded Insurance

All Tags

White-Label Insurance Crypto Insurance Embedded Insurance

By The Boost Team on Jan 6, 2023

4 min read

A closeup of a person checking bitcoin prices on their phone.

While cryptocurrency had a rough few months in the second half of 2022, overall adoption of crypto is higher than ever. In 2022, global crypto ownership rates reached an estimated average of 4.2%, with over 320 million crypto users worldwide, and over 15,000 businesses now accept cryptocurrency payments. Global revenue in the cryptocurrencies segment reached $32.52 billion in 2021 and is projected to reach a staggering $74.3 billion by 2027.

Cryptocurrency usage is growing faster than ever before, but there’s a giant blind spot in the market: safety. There are billions of dollars in cryptocurrency being held in online custody but less than 1% of those assets are insured.

The Glaring Safety Gap in Crypto

Over the past several years, cryptocurrency has become an increasingly popular target for cybercriminals. Since 2014, a number of crypto institutions have been hit by high-profile hacks. For example, the Ronin Network was recently hacked in 2022 for a shocking $614M, making it the biggest crypto hack of all time. PolyNetwork lost $611M in 2021, KuCoin lost $285M in 2020, Coincheck lost $547M in 2018, and the list goes on and on. When these kinds of hacks happen, hundreds of millions of dollars are lost and the exchanges aren’t always able to fully reimburse individual wallet holders.

The Federal Deposit Insurance Corporation (FDIC) protects patrons of traditional banks with fiat money in the event of theft, but no such protection exists for crypto institutions. If digital assets are stolen from a crypto exchange or custodian, whether or not individual wallet holders get their money back is wholly dependent on if the institution is insured and how much insurance they have.

Most crypto institutions do have a commercial insurance policy, which provides some protection to crypto wallet holders, but there is no telling when an individual would receive compensation or how much they would get back due to commercial policy limits. In the 2016 Bitfinex hack, customers lost 36% of their holdings – there was only so much that Bitfinex’s insurer would reimburse, and it was less than the total amount stolen.

What Is Crypto Wallet Insurance?

Historically, individuals have had virtually no options for protecting their cryptocurrency holdings with insurance—until now.

If you follow cryptocurrency news, you may have seen that Boost released the first crypto insurance available to individual wallet holders in April 2022. This first-of-its-kind, white-label insurance product allows individuals to buy protection for crypto wallets held through select custodians.

What Does Crypto Insurance Cover?

Boost’s crypto insurance product is currently the only insurance on the market that is available to retail wallet holders. It covers an insured person’s losses if their crypto is stolen through a breach at a qualified custodian:

If the crypto funds are stolen out of the policyholder’s wallet during a breach.
If attackers access the custodian’s email systems, and send messages from the custodian’s legitimate email domain containing fraudulent instructions for transferring funds.

Like all insurance products, crypto wallet insurance doesn’t cover every scenario that could result in a loss. For example, if the wallet holder loses their key and can no longer access their cryptocurrency, that loss would not be covered by their insurance.

How Does Crypto Wallet Insurance Work?

For the wallet holder, crypto wallet insurance functions very similarly to other types of insurance. The individual crypto holder buys a policy to cover a specific wallet held at a qualified custodian. The amount covered is usually the value of the crypto held in the wallet when the policy is purchased. However, Boost’s crypto insurance product offers the option to extend coverage up to 125% of the insured amount to account for fluctuations in cryptocurrency value.

If the custodian is later breached, and the wallet holder’s assets are stolen, the insured individual is protected from loss. Just like with any other insurance, they can file a claim, and receive the compensation they’re entitled to under their policy.

Even if the custodian suffers a hack severe enough that it’s forced to give haircuts to its wallet holders, a person with an individual crypto wallet insurance policy could ensure that they, at least, recover the full value of their stolen assets.

How Crypto Insurance Can Benefit Your Business and Customers

If your company provides goods or services related to crypto, offering this extra layer of safety to your customers is a great opportunity to increase your revenue, expand your business, and enhance your customer relationships.

1. Increase Revenue and Customer Retention

White-labeled, embedded insurance is a big opportunity for your business to build new streams of recurring revenue. In 2021 alone, the insurance market amassed over $700B in gross written premiums, and that number is only projected to grow.

Rather than trying to sell crypto wallet insurance into a new market of customers, you would be selling to the same audience that you’ve already spent time and money acquiring. Insurance is also a very “sticky” product with a high customer retention rate. White-label, embedded crypto insurance allows you to connect with your existing customers on a new level and establish a deeper, ongoing customer relationship with steady monthly premium payments.

2. Provide a needed service and improve customer satisfaction

Offering crypto wallet insurance is a great way to improve customer satisfaction and positive brand association. You can add value by meeting a genuine need and giving your customers peace of mind about the safety of their crypto assets. If your customers are ever in a position where their assets were lost in a hacking event, they can associate their protected assets and reimbursement with your brand.

Additionally, tech-savvy crypto holders will appreciate the all-digital process - still a rarity in the insurance industry. Boost’s insurtech platform allows your customers to purchase and manage every aspect of their insurance policy in seconds, right from your website or app.

3. Differentiate yourself from the crowd

By offering this first-of-its-kind crypto wallet insurance product, you have the chance to differentiate yourself as uniquely secure and customer-focused by providing your customers with valuable protection. Because this is a new product in crypto and in insurance, by getting in on the ground floor, you can gain an edge in both markets.

Interested in offering crypto wallet insurance to your customers? A Boost expert can help you get started today.

Explore Popular Categories

Boost News Insurance 101 Insurance Infrastructure New Product Development White-Label Insurance

Share this Article

Ready for Liftoff: BHMS Backs Boost

Jul 31, 2024

Friends of Boost, Today Boost is thrilled to announce that we have secured a significant equity investment from BHMS Investments, setting the stage for an incredibly exciting next phase for this company and the amazing team that has built it brick-by-brick over the past seven years. With a rock-solid foundation firmly in place, this partnership is going to supercharge our growth, fuel more innovation, and cement Boost’s position as the go-to infrastructure platform in insurance. We are on a mission to empower MGAs, insurtechs, independent brokers and agents, wholesalers, embedded insurance providers, and really any company that just wants to build, transact, and operate more efficiently in this technology-enabled world of ours. While capital is great, today is about hard-earned validation for our team doing that the right way since Day 1. BHMS is the perfect capital partner for Boost in terms of their insurance expertise and unquestionable track record in the space, but more importantly, they are fantastic people that share both our views on the industry and our principles of company building. The market is dangerously fixed for early and growth stage companies right now (and I say “fixed” intentionally). It’s incredibly easy to get picked off in an environment like that, so it takes a rare mix of both intellect and character to do the right thing when you’re on the capital side of that equation - and even more to be truly value-add to your portfolio companies. BHMS has that mix in spades and appreciated Boost for what it is, what it has accomplished, and what remains an incredibly high ceiling for this company vs. playing short-term charades with the herd. That’s our kind of investor. This investment isn’t just about the money—it's a resounding endorsement of Boost’s strength, credibility, and potential to make a truly meaningful impact on the insurance industry at scale. With BHMS now on board, alongside an incredible group of long-time strategic backers like Markel, RenaissanceRe, and Canopius, we’re ready to take our game to the next level. Our mission has always been to disrupt the insurance space with cutting-edge tech and unparalleled service, and this backing proves that disrupting responsibly is the only approach that works in our industry. Anyone can grow fast if they don’t care about quality or long-term credibility. At Boost, we underwrite profitably, we respect compliance, and we always - always - take a collaborative approach with our stakeholders across the entire value chain. As someone with literally zero patience, I can personally attest to that being incredibly difficult to do at times - but it scales. Even with the market’s ups and downs, Boost has been a powerhouse of innovation in the insurtech landscape with equal commitment to disruption and reliability. Doing things the right way does not mean you cannot innovate - or even disrupt - and leveraging best-in-class technology is not a right reserved for #insurtechs. Our platform has always been a one-stop shop for insurtechs and embedded insurance providers and MGAs, independent agents and brokers, and wholesalers alike - offering everything from product development to underwriting and program management to claims administration and reinsurance capacity. With our proprietary tech and a dream team of industry pros, we’re delivering smarter, more efficient solutions than ever before. Since our first program launched in 2019, we’ve underwritten over $200 billion in coverage, which is a somewhat staggering figure in hindsight. Today we’re proud to support programs for giants like Amwins along with trailblazers like Cowbell, Newfront, and Wagmo, and we’re grateful for all of the companies that chose to build with Boost even when Boost itself was just getting started. Our steady, disciplined approach has kept our portfolio profitable and we like to think that has kept our partners in front of us very happy as well. All of Boost’s success is thanks to what is hands down the best team in the industry. Hard stop. Their grit, dedication, and willingness to tackle tough challenges head-on has been crucial. Boost’s commitment to quality starts with our team and is reflected in them every single day. We keep things lean at Boost because that quality always outperforms quantity. Even if that approach always requires more from each individual and makes the stakes a bit higher, working with the right people makes the returns on each long hour invested that much more gratifying. Few people exemplify those principles or have demonstrated such an unwavering commitment to Boost more than Jeremy Deitch, so I am also thrilled to announce that Jeremy has been promoted to President at Boost and will join me on our Board of Directors. Jeremy’s leadership has been critical since the day he started at Boost almost 6 years ago, following probably the most grueling interview process in our company’s history - one he is always happy to dramatize even more if you ever ask him. ;) I couldn’t be more grateful to have a partner like him as Boost soars to new heights. With this new investment, we’re geared up to boost (pun intended) our growth and expand our tech offerings. We’re planning to scale our MGA programs, roll out new products, and snap up some strategic acquisitions. Our goal? To make building a business in insurance easier, faster, and more efficient for everyone so they can better serve their customers. We’re more fired up than ever about our mission to empower insurance providers with the tech and infrastructure they need to thrive. This partnership with BHMS is just the beginning. The future is bright, and we’re ready to lead the charge. Thank you to everyone who has been part of our journey thus far. Let's all keep pushing boundaries together - because the best is yet to come. Special thanks to the team at Howden Capital Markets & Advisory for helping Boost always say what it’ll do and do what it says. You can find our full press release here and, more importantly, can start joining our platform here. All my best, Alex Maffeo CEO & Founder Boost Insurance

The text "Trends at Money 20/20 2021" appears in white lettering over a dark-colored abstract background

Partnerships and Focus: Big Trends at Money20/20

Nov 3, 2021

It was a busy October for the team at Boost Insurance, wrapping up with one of our favorite industry events: Money20/20. The conference was a super interesting contrast to ITC which was laser-focused on insurance, while Money 20/20 was more about fintech in general and much, much bigger! With fintech about ten years ahead of insurtech in terms of maturity, it’s interesting to see the level of innovation and diversity of companies in our big brother industry. Here are some of the big trends we noticed. One of the really interesting trends that kept being repeated at Money20/20 was a shift in mindset among both fintechs and banks. In the past, they have tended to see each other as competition for consumers’ business and attention but now everyone is moving towards viewing each other as complementary vs. competitive. We saw multiple collaborative efforts between the upstarts and the established, working together to create a better customer experience. This works because they each have a specialization (fintechs excel at meeting modern consumer expectations and banks are experts in profitably navigating a very regulated, very complex business), and partnership lets them bring both those strengths to the table. This was extra interesting to us at Boost because it reflects what we see in insurance, with insurtechs and carriers working together and bringing their own strengths together to meet modern consumer needs and expectations. For example - Boost has built a modern tech platform making various insurance products available via API but partners with established reinsurance companies to facilitate risk transfer. There will still be winners and losers between the incumbents and the upstarts, but as collaboration and competition continue consumers will be the clear winners. A trend I’ve written about before, and one that we continue to see play out, is tech companies’ focus on affinity groups. Fintechs are springing up all over with explicit goals of serving a relatively narrow group of people and serving them well. Companies like Paceline for people focused on health and wellness, Daylight for the LGBTQ+ community, and First Boulevard for African-Americans are just some of the fintechs concentrating on being the best option for a specific set of consumers. This is pretty much the opposite of traditional one-size-fits-all programs - instead of creating something broad that can be good enough for the biggest slice of people, creating something very targeted that can be great for a specific niche. This trend is great news for consumers who traditionally have not been served well by financial services in general. At Boost we’re starting to work with more affinity-focused companies because our modular, customizable product structure allows partners to tailor insurance for their customer needs. It’s exciting to be part of making insurance more accessible to all groups of people! Finally, it was really exciting and validating to see so much interest in new approaches to traditional industries. Finance and insurance have historically had a reputation for being very slow to change, sometimes for good reason (highly regulated, handling people’s money is a big responsibility, etc). This year though there’s a ton of interest in potential innovations, look no further than the enormous presence of blockchain and crypto-focused companies at Money20/20! Boost met with a TON of different companies during the show, and we cannot talk about anything yet but be on the lookout for some very interesting things coming in the near future! Money2020 was a heck of a conference and while my conference year is wrapped, the Boost team will be out and about at shows the rest of the year. We are looking forward to more opportunities to meet people in 2022, so if you did not get a chance to connect with us at Money2020, just drop us a line.

Closeup on a coffee cup, a notebook, and a pair of glasses sitting on a desk. In the background, a person types on a laptop.

Boost Partner Stories: Overalls Launches All-in-One Insurance Protection Portfolio

Oct 4, 2021

We founded Boost with one (very) big goal: to modernize insurance. Traditionally, it’s been hard for people to get the coverage they need, or even understand what’s available to them. One-size-fits-all products, irrelevant bundled-in coverages, and difficult-to-parse policies mean that many people who would benefit from the protection of insurance just go without - and risk unnecessary losses. Here at Boost, we’re working with innovative partners across the industry to change that, and help ensure more people have access to the loss protection they need. That’s why today we’re excited to congratulate our partners at Overalls on exiting stealth mode with their official public launch. The Overalls all-in-one protection platform offers a way to tap into an overlooked employer benefit - supplemental insurance. Few employees take advantage of these offerings - largely because, Overalls explains, they’re confusing and the benefits are unclear. Overalls aims to change that, with an algorithm that can analyze consumers’ financial milestones and targets, with information about their personality and lifestyle, to create a personal portfolio of the best plans available. Through their employers, consumers are able to access the Overalls platform and source the right insurance protection for themselves and their families, more easily than ever before. So how does Boost fit in? Our insurance-as-a-service platform provides the infrastructure for partners like Overalls to easily build and manage their insurance businesses. We’re proud to provide Overalls with important technological, operational, compliance, and capital components they need in an elegant turnkey solution, so they can offer their customers a seamless, tailored buying experience with policies designed for modern lifestyles. You can learn more about Overalls at their website, and in an interview with co-founder and CEO Jon Cooper. For more on how Boost can help you unlock significant recurring revenue with insurance, don’t hesitate to drop us a line - we’re always happy to talk. P.S. - Attending ITC 2021 in Las Vegas this week? So are we! You can catch Boost at Booth #713