Incumbents say local expertise and intimate understanding of business risks are key to insuring digital assets.

In 2022, many underwriters baulked at the prospect of insuring digital assets. The risks were too many and too imposing to quantify unless you had significant expertise in the area.

Now, the landscape is about to change. Top-tier underwriters are eyeing off a regulatory proposal that will see digital asset providers needing an Australian financial services licence (AFSL) to operate, giving insurers more comfort.

Then there is the tantalising growth potential of the market, where everything in the financial world becomes tokenised, including titles to land and shares in funds.

But it won’t be smooth sailing for newcomers. In front of them are incumbent underwriters and brokers that have been understanding and pricing the risks for years.

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