Hacker attacks are a persistent threat for online game addicts. Due to poor security awareness among players and rapidly evolving hacking technologies, millions of dollars worth of virtual gear and virtual currency — or even the entire game accounts in where all the virtual assets are kept — are stolen every day.
At present, China is estimated to have about 331 million online gamers. In other words, one out of two internet surfers has the habit of playing virtual games. The market now worth about 25 billion yuan (US$4.1 billion) and it is expected to reach the 100 billion yuan mark by 2015.
With the bustling market and the hacking risk, a new business opportunity has emerged for financial firms to provide insurance coverage for virtual assets.
Sunshine Insurance, a lesser-known firm, took the lead in the segment but the biggies too joined the fray soon, with PICC Property & Casualty Co. (02328.HK), Ping An Insurance (02318.HK, 601318.CN) and China Life (02628.HK, 601628.CN) offering insurance protection for virtual property.
China Life, the country’s biggest insurer in terms of market value, has tied up with 5173.com, the nation’s largest e-trading platform for online game assets, to launch its first insurance product for virtual properties late last month.
The insurer was surprised by the overwhelming market response to the new service. In the first ten days after the launch of its cyber insurance product, China Life sold as many as 2,533 policies, Securities Daily reported. Although the combined sum insured remains negligible, the emerging business and strong demand has caught the attention of everyone.
As gamers in the cyberspace are mostly young and open-minded, virtual asset insurance can also become an ideal entry point for insurers to cross-sell other higher margin products to the customers.
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