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Auto insurance company Metromile will soon allow policyholders to pay premiums with cryptocurrency and even receive claims compensation in this scorching form of digital currency.
San Francisco-based Metromile, which offers paid-per-kilometer insurance, says it will deploy cryptocurrency capabilities later this year. Metromile spokesman Rick Chen said no launch date has been set for the cryptocurrency program.
Metromile says it will be the first insurer to accept premiums and pay claims in cryptocurrency. Policyholders will be able to choose either cryptocurrency or old-fashioned dollars for premium and claims transactions.
Mileage insurance is a form of auto insurance that can lower rates for people who don’t drive a lot. Monthly bills are calculated using a base rate plus a per mile rate for the month.
Premier Shield Insurance, a Massachusetts-based insurance agency, says it allows policyholders to pay auto, home and business insurance premiums and agency fees with Bitcoin, up to a limit of $ 5,000. But Premier Shield’s Bitcoin program does not apply to payment requests.
Metromile “launched this option to meet the growing demand for Bitcoin and cryptocurrency payments from our customers. We’ve been planning to support Bitcoin for years, but it wasn’t until recently that the technology and consumer adoption of Bitcoin was widespread enough that we could offer this, ”Chen said.
Metromile announces that it will buy $ 10 million worth of Bitcoin in the second quarter of this year to pave the way for cryptocurrency transactions. In a press release, the company says it “believes that allowing cryptocurrency payments will support its commitment to fairer insurance and promote the financial resilience of policyholders as cryptocurrency becomes mainstream and represents a larger share of consumer assets “.
Bitcoin is the original cryptocurrency, a form of currency that people can buy, sell or trade without the intervention of a bank. While Bitcoin is the most well-known cryptocurrency, dating back to 2009, it is now among the more than 5,000 cryptocurrencies in circulation today. As of May 5, the global cryptocurrency market was valued at $ 2.4 trillion, according to CoinMarketCap.
In the press release, Metromile CEO Dan Preston said adding Bitcoin as a payment option “is the next logical step” for the digital insurance platform and its claims process based on it. ‘artificial intelligence. The company said it will work with regulators to address their concerns about Metromile’s adoption of cryptocurrency.
Metromile currently offers coverage in eight states: Arizona, California, Illinois, New Jersey, Oregon, Pennsylvania, Virginia and Washington. At the end of 2020, Metromile had 92,635 auto insurance policies in force, according to Chen.
The company plans to launch an expansion in the United States in the second half of 2021. Chen says Metromile policies will be available nationwide by the end of 2022.
What is the position of the insurance industry on cryptocurrency?
In a recent report, the National Association of Insurance Commissioners (NAIC) states that no NAIC committee or group “has taken any action or taken a position on cryptocurrencies.” The association says its staff “will continue to monitor developments in cryptocurrencies and investigate this further. . . . “
Kyle Schmitt, vice president of insurance intelligence at market research firm JD Power, believes insurance regulators generally have a “non-positive view” of cryptocurrency because of its price fluctuations.
“Accepting payments in Bitcoin is fairly easy if they are immediately converted to dollars upon receipt,” Schmitt says, “but premiums paid in Bitcoin could be very volatile.”
Bob Hunter, director of insurance at the nonprofit Consumer Federation of America, said his stance on insurers with an interest in cryptocurrency would likely mirror Warren Buffett’s overall stance on cryptocurrency. The billionaire investor sharply criticized cryptocurrency as a risky and worthless asset.
“As a regulator, I wouldn’t accept Bitcoin as a backup of the business,” said Hunter, a former Texas insurance commissioner. “If consenting adults want to pay each other, I would allow it. But I would like something more solid – dollars – to be there behind the business in an emergency.
Such relief funding is known in insurance circles as “surplus”. It is the excess of an insurer’s assets over its liabilities. Additionally, Hunter believes that any insurer that trades in cryptocurrency should keep a net amount of money in their reserves. Insurers are supposed to set aside a portion of the premiums in their reserve funds to cover possible future claims.