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U.S. insurance broker and wealth management firm IMA Financial Group recently announced the launch of IMA Web3Labs, what the company deems the metaverse’s first insurance and risk management research and development facility. Following in the footsteps of JPMorgan, the first bank to set up shop in the metaverse, it will also be located in Decentraland, the company said.
IMA Web3Labs will initially research risk mitigation specific to NFTs, the company said, as it recognized a gap between the growth in NFTs and fundamental risk transfer and management strategies to secure them.
Justin Jacobs, IMA Financial Group senior vice president of marketing and architect of IMA Web3Labs, told GOBankingRates that IMA’s goal “is to stay ahead of our clients so we can effectively manage risk and develop insurance solutions that protect assets.”
“Through Web3Labs we can swiftly test, learn and adjust from within, in a meta-native environment, so we can assess the risks associated with digital and meta assets and create new solutions. We aren’t content to take the ‘wait and see’ approach that our industry often favors,” he said.
Asked why IMA chose to partner with Decentraland, Jacobs said that the quality of creators and companies entering Decentraland will give the platform a long-term advantage when it comes to overall user experience (UX), which will create more value for all participants.
In terms of the audience IMA is targeting, Jacobs said the company’s clients range from multi-national companies to small businesses to individuals — and include some of the top bitcoin mining companies in the U.S. — companies representing more than 30% of the total hash rate in America.
“With the explosion in the NFT market and great advances in the use of blockchain technology, we believe our clients are in the metaverse or exploring the opportunities. We want to be ready to solve risk and insurance concerns that may come up,” he said.
Sarojini McKenna, co-founder of blockchain game Alien Worlds, told GOBankingRates that IMA Financial Group’s move to launch an insurance lab in the metaverse — and immediate focus on NFTs — shows that while the world is beginning to see the metaverse’s potential for a wide variety of applications, security and indemnity surrounding this technology is beginning to be taken more seriously.
“An increasing number of businesses are opening branches in the metaverse, recognizing the important role digital services will play in the future, and with that companies are looking to take the necessary precautions,” McKenna said. “NFT fraud and scams have been making headlines, and these issues ultimately undermine the long term viability of this digital asset class. To people outside of the crypto space, NFTs may feel like a precarious investment for a variety of reasons. By assessing risk and providing insurance on these assets, IMA Financial Group is filling a gap in the market and promoting consumer confidence, which is something the industry desperately needs at this point in time.”
While the crypto market at large has been slumping in the first months of the year, NFTs continue the explosive trajectory they have been on since 2021. In fact, global NFT sales hit a record $7.3 billion in January, according to data compiled by The Block.
This market generated $25.5 billion in trades last year — 18,400% more than the four previous years combined, according to a recent DappRadar report.
Reeve Collins, co-founder of BLOCKv, told GOBankingRates that the utility of NFTs will one day move far beyond art alone — and will incorporate everything from deeds to homes and car insurance, perhaps becoming equivalent to existing two-factor authentication protocols.
“As you can imagine, a huge amount of value will be stored in these assets and, thus, it will be critical that those who partake in forthcoming metaverse worlds protect those assets,” Collins said. “So it’s only natural that we are seeing the beginnings of insurance products preparing for protecting the wealth that will be vested in Decentraland and other digital systems. It’s exciting that we are seeing all sorts of industries trying to get involved in the metaverse, such as JPMorgan opening up a virtual location for their bank, and it’s clear the insurance industry will have a big role to play.”
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