Specialty reinsurer Canopius Group will underwrite its digital asset custody product from Singapore to become the first carrier on the Lloyd’s Asia platform to provide such coverage locally.

Custody refers to the generation and storage of private keys, which enable the transfer of digital assets on a blockchain. Canopius can offer an individual line size of up to US$130m for eligible custody solutions, and the product provides coverage traditionally only available in the crime and specie markets separately. The product will be available to financial institutions and covers a range of digital assets, including cryptocurrencies, stablecoins and crypto tokens.

The launch marks an extension of the product Canopius Syndicate 4444 underwrites in London, catering to a growing demand from the increasing number of businesses exploring digital asset holdings in the Asia Pacific region.

Nicholas Edwards, head of specie at Canopius, said: “To date, this class of business has been written primarily from London, so we’re pleased to be able to offer the specialist knowledge required to underwrite this class of business regionally, tailored to countries throughout APAC. We are looking forward to developing even closer working relationships with our clients and distribution partners in the region, and being able to establish more touch points with local regulators who are facilitating the growth of this nascent sector.”

Paul Hackett, head of short tail APAC & MENA, at Canopius, added: “As the market matures, increasingly more established financial institutions are exploring the potential of digital assets for their business. Given regulators’ welcoming stance toward digital assets in APAC, notably in Singapore, Hong Kong and Japan, many of those businesses are choosing to expand here. However, while welcoming, their regulatory requirements are firm. Businesses interested in digital assets will need an experienced risk-bearing entity to help them manage the potential exposures of custody, which in turn will raise the bar for the security of the sector overall.”

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