Decentralized Insurance Market Report 2025

The decentralized insurance market size has grown exponentially in recent years. It will grow from $2.36 billion in 2024 to $3.5 billion in 2025 at a compound annual growth rate (CAGR) of 48%. The growth in the historic period can be attributed to increasing interest in blockchain technology, a rise in cryptocurrency adoption, growing dissatisfaction with traditional insurance, the emergence of decentralized finance (DEFI), and early investment in insurtech startups.

The decentralized insurance market size is expected to see exponential growth in the next few years. It will grow to $16.94 billion in 2029 at a compound annual growth rate (CAGR) of 48.4%. The growth in the forecast period can be attributed to the expansion of web3 ecosystems, rising demand for transparent insurance solutions, increasing cyber threats, and global regulatory developments supporting decentralized finance (DeFi). Major trends in the forecast period include tokenized insurance products, smart contract-based claim settlements, peer-to-peer insurance models, interoperability across blockchain platforms, and decentralized autonomous organization (DAO)-governed insurance pools.

The forecast of 48.4% growth over the next five years reflects a slight reduction of 0.2% from the previous projection. This reduction is primarily due to the impact of tariffs between the US and other countries. This is likely to directly affect the US through slower protocol development, as oracle network services and cross-chain interoperability solutions, predominantly developed in Switzerland and Singapore, face implementation delays due to increased technology import costs. The effect will also be felt more widely due to reciprocal tariffs and the negative effect on the global economy and trade due to increased trade tensions and restrictions.

The growing adoption of cryptocurrencies is expected to drive the expansion of the decentralized insurance market. Cryptocurrencies are digital or virtual currencies that rely on cryptography for secure transactions and operate on decentralized networks, typically built on blockchain technology. The rise in cryptocurrency adoption is attributed to the financial freedom they offer, enabling users to transact without relying on traditional banks or government control. Decentralized insurance in the crypto space provides transparent, trustless protection against blockchain-related risks through smart contracts and community-funded pools. For example, in November 2024, the Financial Conduct Authority, a UK-based regulatory body, reported that 12% of UK adults own cryptocurrency, up from 10% previously, with awareness rising from 91% to 93%. The average value of crypto holdings also grew from $2,000 (£1,595) to $2,300 (£1,842). This surge in cryptocurrency adoption is fueling the growth of the decentralized insurance market.

Key players in the decentralized insurance market are focusing on developing innovative solutions, such as risk management infrastructure layers, to improve efficiency and transparency. These layers enable decentralized insurance by assessing, pricing, and mitigating risks using data analytics and smart contract automation. For example, in March 2023, Nexus Mutual, a UK-based decentralized insurance provider, launched Nexus Mutual v2 on the Ethereum mainnet. This upgrade introduced a modular system that allows users to create and manage their own mutuals for different risk types, including smart contract and custody risk. The new version supports permissionless product development, cross-chain functionality, and better capital efficiency, enabling broader participation in decentralized risk-sharing. Nexus Mutual v2 aims to drive the growth of blockchain-based insurance by fostering innovation and community-driven insurance models.

In August 2023, InShare, a UK-based provider of alternative risk transfer and mutual insurance solutions, teamed up with Nexus Mutual to utilize on-chain capital to cover excess losses for small independent retail businesses in the UK. This partnership allows Nexus Mutual to offer discretionary excess and aggregate risk transfer support to The Retail Mutual, which protects over 5,000 small retail businesses, including shopkeepers, from risks including fire, theft, and accidental damage. Nexus Mutual is a UK-based decentralized insurance provider, specializes in offering smart contract coverage to mitigate risks within decentralized finance (DeFi) platforms.

Major players in the decentralized insurance market are Mapfre S.A., Lemonade Inc., Solace, Aon Risk Services Limited, Chainlink, PrimaFelicitas Ltd, SoluLab, Etherisc GmbH, Webcom Systems, DeFiprime.com, Tidal Finance, Neptune Mutual, Unslashed Finance, Bridge Mutual, WeAlwin Technologies Pvt Ltd., Bitdeal, Developcoins, Bright Union, Nexus Mutual, and OpenCover.

North America was the largest region in the decentralized insurance market in 2024. Europe is expected to be the fastest-growing region in the forecast period. The regions covered in decentralized insurance report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa. The countries covered in the decentralized insurance market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The decentralized insurance market consists of revenues earned by entities providing services such as blockchain-based insurance solutions, smart contract-driven policy management, peer-to-peer risk sharing, and automated claims processing. The market value includes the value of related goods sold by the service provider or included within the service offering. The decentralized insurance market also includes sales of decentralized applications (dApps), blockchain infrastructure, tokenized coverage platforms, governance tools, and crypto wallet integrations essential for facilitating decentralized risk management and claim execution. Values in this market are ‘factory gate’ values, that is, the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report’s Recommendations and Conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.

The sharp rise in U.S. tariffs and the ensuing trade tensions in spring 2025 are having a considerable impact on the financial sector, particularly in the areas of investment strategies and risk management. The increased tariffs have intensified market volatility, leading institutional investors to adopt more cautious approaches and driving greater demand for hedging solutions. Banks and asset managers are encountering higher costs in cross-border transactions as disrupted global supply chains and declining corporate earnings weigh on equity market performance. At the same time, insurance providers are facing elevated claims risks linked to supply chain interruptions and trade-related business losses. Furthermore, reduced consumer spending and weaker export demand are limiting credit growth and dampening investment appetite. In response to these challenges, the sector must focus on diversification, accelerate digital transformation, and strengthen scenario planning to manage the heightened economic uncertainty and safeguard profitability.

Decentralized insurance refers to a blockchain-based insurance model that eliminates traditional intermediaries by using smart contracts to automate processes such as policy issuance, premium collection, and claims processing. It facilitates peer-to-peer risk sharing, offering enhanced transparency, efficiency, and trust by recording all transactions on a decentralized ledger. This model is particularly popular in decentralized finance (DeFi), where it helps protect against risks including smart contract failures, protocol hacks, and more.

The main types of decentralized insurance include property insurance, health insurance, business insurance, life insurance, and travel insurance. Property insurance offers financial protection for physical assets, such as homes, buildings, and personal belongings, against risks including fire, theft, or natural disasters. This form of insurance integrates technologies including blockchain, distributed ledger technology, artificial intelligence, smart contracts, and the internet of things. These technologies are applied through various models, such as peer-to-peer, centralized, open source, mutual, and consortium models, and are used for applications in insurance exchanges, risk assessment, claims processing, underwriting, and reinsurance.

The decentralized insurance market research report is one of a series of new reports that provides decentralized insurance market statistics, including the decentralized insurance industry's global market size, regional shares, competitors with a decentralized insurance market share, detailed decentralized insurance market segments, market trends and opportunities, and any further data you may need to thrive in the decentralized insurance industry. This decentralized insurance market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenarios of the industry.

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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