Non-fungible tokens (NFTs) are a $41 billion business, and where there’s several zeros behind any product, there are usually insurers. However, that’s not the case with NFTs, a segment of the cryptocurrency market that wasn’t worth even 1% of that two years ago.
But, with the announcement today (March 3) that insurance broker and wealth manager IMA Financial is investing in an R&D facility to figure out how to assess risk and underwrite coverage of NFTs, it seems pretty clear that lack of coverage is about to change.
NFTs are unique cryptocurrency tokens that hold images, video or pretty much any form of media. The files cannot be changed and are tracked on blockchains. Artworks, NBA slam dunks and seven-figure, eight-bit images of CryptoPunk aliens can all be found on NFTs. The most expensive, a digital collage by artist Mike Winkelmann, drew a winning bid of $69 million at a Christie’s auction last year — despite the fact that the buyer did not get the actual copyright to the work, or even exclusivity rights to display.
Figuring out how to value NFTs, assess risk and…