Paying for travel insurance in crypto-currency

Crypto-currencies are becoming increasingly important in the financial markets but their democratisation among the general public is still in progress. However, a new use for these alternative currencies seems to be developing, in the context of insurance policy payments. Insured Nomads demonstrates this.

FACTS

• Insured Nomads, a US-based insurance group, has formalised its partnership with Cover Compared, an Estonian start-up offering an insurance marketplace entirely dedicated to the crypto ecosystem and decentralised finance.

• The two new partners have been working together to deploy a new payment solution for insurance policies. Rather than the traditional direct debit, bank transfer or cheque, Insured Nomads' policyholders will now also be able to choose to pay for their policy in crypto-currencies.

• Ethereum, CRV tokens, USD Coin and DAI (stablecoins indexed to the US dollar), Tether and Polkadot tokens are currently accepted by Insured Nomads.

CHALLENGES

• Reducing costs: The promise at the heart of Cover Compared's business is to reduce the transactional and administrative costs of insurance policies and coverage in general. This is the same promise that the group is now delivering through its partnership with Insured Nomads. The borderless insurer is even promising a 25% discount to customers who wish to pay via CRV tokens.

• Getting around currency exchange issues: As its name suggests, Insured Nomads is aimed at nomads. By accepting crypto-currencies, it hopes to simplify the lives of its customers by freeing them from the constraints of currency exchange and conversion, regardless of their host country when paying for their policy.

MARKET PERSPECTIVE

• Airbnb, the holiday rental giant, is also working on accepting crypto-currencies as a means of payment on its platform, further boosting their deployment in the tourism market.

• In addition to Insured Nomads, in the insurance market in general, another Alsatian broker, Assurance du Lion, recently announced that it would accept crypto-currency payments for the settlement of their premiums. Axa also committed itself to this path in April 2021 in Switzerland.

• Beyond the insurance or tourism sector, crypto-assets are slowly but surely being deployed elsewhere. In addition to MNBCs, some private players are participating in their democratisation, such as PayPal or Ledger. Their integration into the real economy is becoming more and more concrete every day.