Dubai, UAE – Two UAE-based insurance companies have joined forces to introduce a range of insurance products tailored for businesses operating in emerging sectors such as digital assets, blockchain, artificial intelligence (AI), biotechnology, and the space economy. The collaboration between Liva Group and Relm Insurance MENA aims to offer protection to startups and established enterprises facing unique risks in these industries.
Addressing a Critical Market Gap
Speaking at a media roundtable, Joseph Ziolkowski, CEO and Founder of Relm Insurance, emphasized the need for insurance solutions in these rapidly evolving industries. “We are focusing on providing access to insurance products that these companies need to grow their business and stay protected,” he stated. “Products like directors' and officers' liability insurance, professional liability insurance, and cybercrime insurance are foundational coverages that any company in these sectors will require.”
Industry experts have long pointed out that companies in emerging fields often struggle to secure adequate insurance policies due to the lack of historical data and the perceived high-risk nature of their operations.
Lessons from Bybit's $1.5 Billion Hack
The launch of these new insurance products comes in the wake of a significant cybersecurity breach affecting Dubai-based cryptocurrency exchange Bybit. The attack, which resulted in losses estimated at Dh5.51 billion ($1.5 billion), has been described as a wake-up call for the industry.
“There will be extensive discussions about the cause of the loss, whether insurance was in place, and if it will respond to the situation,” Ziolkowski said. “These events provide crucial insights into vulnerabilities within the digital asset economy and highlight the importance of comprehensive risk management.”
Challenges in Insuring Emerging Sectors
Martin Ruegg, Group CEO at Liva Group, acknowledged the challenges insurers face when providing coverage for new and evolving industries. “The insurance industry relies on hundreds of years of data sets to determine pricing and risks,” he explained. “This is something we don’t yet have in the case of digital assets.”
Many firms operating in blockchain and Web3 technologies struggle to secure coverage due to the perceived volatility of the industry. Ruegg noted that up to 80% of traditional insurance companies decline to issue policies for these sectors, which can hinder regulatory compliance and business growth.
Bridging the Insurance Gap for Web3 and Digital Assets
Ziolkowski highlighted a significant gap in the UAE insurance market, particularly for companies seeking licensure through the Virtual Assets Regulatory Authority (VARA). “There is ample insurance and reinsurance capacity in the UAE, but it is primarily geared toward traditional industries,” he said. “When you examine the growing pipeline of companies in digital assets, payment platforms, custodians, and hedge funds, there’s a clear need for specialized insurance solutions.”
By addressing this gap, Liva Group and Relm Insurance MENA aim to support the growth of digital asset companies while mitigating the risks associated with cybersecurity threats and regulatory uncertainties.
A Step Towards Strengthening Market Confidence
The introduction of insurance solutions tailored for digital assets and Web3 firms marks a significant step in strengthening market confidence and enabling sustainable growth in these industries. As the UAE continues to position itself as a global hub for blockchain and digital finance, the availability of robust insurance products could play a crucial role in attracting investment and fostering innovation.
