AIG launches crowdfunding investment product
AIG has launched a new product for the fast-growing global crowdfunding investment industry.
Crowdfunding Fidelity protects individual investors against the theft of issuer assets by issuer directors, officers, or general employees which cause a direct loss to the individual investor.
The coverage is currently available to platforms in the UK and Canada. As other countries finalise regulations for companies to raise capital, this policy can be customizsed to local needs of equity-based crowdfunding platforms.
Eureeca, an equity crowdfunding platform registered in the UK and based in Dubai, is the first platform to purchase the coverage and make this protection against issuer fraud available to investors.
AIG engaged with Eureeca to gain a deeper understanding of the industry’s risk exposures, ensuring that the product was designed specifically to address these needs. Eureeca launched in 2013 and focuses on providing deals from the Middle East, Europe, and Southeast Asia.
This is the first new insurance product developed specifically to protect investors on equity crowdfunding platforms against issuer fraud, according to the insurance firm.
Crowdfunding platforms enable innovators to bring their ideas to life and also give retail investors the opportunity to provide capital for start-ups and growth stage companies around the world, said AIG.
Historically, only high net worth individuals and institutional investors such as venture capital funds and private equity firms were offered these opportunities.
“As a sector still in its infancy, equity crowdfunding platforms are only as strong as the confidence they instill in their investors,” said Lex Baugh, president of liability and financial lines. “This new product will help provide that confidence and help to support this asset class as it matures.”
Baugh added: “Crowdfunding Fidelity is a great example of how AIG learns together with the industries and clients it serves to better meet their strategic needs.
“We are looking forward to building similar relationships with other platforms across the world and to expanding our offering to this sector.”
Chris Thomas, co-chief executive officer and founder of Eureeca, “The new power of the crowd and the desire to democratise investing throughout the world can unleash great partnerships.
“The success of the ecosystem depends on collaboration between all stakeholders. AIG has demonstrated its commitment to being a valued insurer to this new industry by engaging the crowdfunding space at such an early stage.”
