Pan-African insurance company axes coverage for crypto mining equipment

12 Jun, 2019
by Colin Hawkins
News
Pan-African insurance company axes coverage for crypto mining equipment

Insurance for crypto mining equipment is no longer covered by the Pan-African insurance company; Old Mutual. According to the local news outlet, ITWeb on June 10, the insurance company is pulling mining coverage from their portfolio due to the lack of regulation in the crypto industry.

Along with the absence of regulation in the cryptocurrency community, the company lists various other negatives in the industry to back up the decision of cancelling their insurance policies for mining equipment. The negatives they listed included the fraudulent activity surrounding crypto as well as liability reasons since some users may modify their equipment that can lead to overheating and other issues.

Coming directly from Chistelle Colman, an insurance expert at Old Mutual insurance company, she stated that:

“We have chosen not to provide cover for this type of risk as it is quite tricky to conduct a proper risk analysis of an unregulated fledgling industry that is already on the radar of financial authorities due to the unfortunate association with money laundering and cyber crime.”

Colman also spoke on the complexity of the industry playing a roll in Old Mutual’s decision:

“It is also a highly volatile industry that attracts a lot of speculators so there is no proper risk rating structure in the local market for this type of risk. Even doing a comprehensive inventory of the insured equipment is difficult because the value of the highly modified computer equipment is typically inflated and almost impossible to verify as it is usually imported from obscure suppliers in the Far East.”

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