Hong Kong-Based Digital Assets’ Insurer Weighs SPAC, Partners With Munich Re

By Sarah Zheng | April 12, 2022

OneDegree, a Hong Kong-based insurer of digital assets, has been approached by investment banks about going public through a blank-check company, its co-founder said.

The firm, one of four with a so-called virtual insurer license in Hong Kong, expects to carry out a funding round in coming months to finance expansion, Alvin Kwock said in an interview without giving specifics. He said no decision has been made on whether to merge with a special purpose acquisition company, or SPAC. OneDegree raised $28 million in August.

“In the last four years, we have had fundraising pretty much every year,” Kwock said. “With the type of large market that we are seeing, I do think that there is a lot of interest coming from the investment community.”

The company, which began selling protection on digital assets last year, on Monday announced a partnership with German reinsurance firm Munich Re to offer coverage of cyber-security risks for trading platforms, custodians, asset managers and technology providers. It is also working with pilot customers to insure “offline” risks, covering physical products and real-life services that are linked to a digital assets like nonfungible tokens.

Soaring crypto hacks and thefts means insuring such assets is a booming business. The value of crypto thefts jumped six times last year to $3.2 billion, according to blockchain researcher Chainalysis. More than two-thirds of that was looted from decentralized finance platforms, where counterparties interact directly via so-called smart contracts.

OneDegree, founded in 2016, said sales jumped 30% in the first quarter from the previous three months, and that its number of customers has doubled to 200,000 since last summer. It is now seeking to compete with traditional insurers in areas including pets, health and real estate, Kwock said.

Photograph: View of buildings from Victoria Peak in Hong Kong, China, on Thursday, Jan. 27, 2022. Photo credit: Paul Yeung/Bloomberg.

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