{"id":30563,"date":"2026-08-31T04:00:00","date_gmt":"2026-08-31T02:00:00","guid":{"rendered":"https:\/\/www.thebrokernews.ch\/?p=30563"},"modified":"2026-08-24T14:20:45","modified_gmt":"2026-08-24T12:20:45","slug":"tokenization-why-insurer-rethink-risk-valu","status":"publish","type":"post","link":"https:\/\/www.thebrokernews.ch\/en\/tokenization-why-insurer-rethink-risk-valu\/","title":{"rendered":"Tokenization: Why Insurers Need to Rethink Risk, Value, and Trust"},"content":{"rendered":"
Laura Arenas does not view tokenization as a substitute for trust.<\/span><\/div>\n\n\n\n

An asset can be tokenized today. But what happens if the token is tradable, yet the market remains illiquid, or if the digital claim does not correspond to legal ownership? This is precisely where the real insurance question arises.<\/strong><\/p>\n\n\n\n

Let\u2019s imagine a piece of real estate for a moment. Not just any piece of real estate, but a building in Zurich. So far, it\u2019s pretty clear what that entails: ownership, the land registry, financing, rental income, and, of course, insurance. Now, the economic rights associated with this property are being represented digitally. An asset that is difficult to divide is transformed into digital units that can be transferred and potentially traded on a secondary market. Technically, much of this is already possible today. But as soon as we take it a step further, the story gets more interesting. What does the buyer actually own? The token? A share of the economic value? A legal claim? And what happens if the digital infrastructure works but the underlying market suddenly becomes illiquid? It gets even more interesting for the insurance industry.<\/p>\n\n\n\n

What risk is an insurer actually supposed to cover in this case: the asset, the token, or the infrastructure in between? At first glance, these questions seem technical. In fact, they go straight to the heart of the insurance business: What constitutes value, when does that value give rise to a risk, and what is the basis for our confidence that a claim will ultimately be enforceable? This is precisely where the story of tokenization<\/a> for the insurance industry begins.<\/p>\n\n\n\n

From Digitization to Tokenization<\/strong><\/h6>\n\n\n\n

The financial sector has been undergoing digital transformation for decades. First, information became digital; then, processes did. Today, we are witnessing something different. Economic rights and assets themselves are increasingly being represented digitally. That is the crucial difference. A digitized document is not yet a digital asset. A tokenized asset, on the other hand, can be structured in such a way that certain rights are digitally represented, transferred, and\u2014depending on the legal and technical design\u2014can even be partially programmable. This changes not only the technology behind a transaction but also how value is transferred within the financial system.<\/p>\n\n\n\n

The Bank for International Settlements (BIS) now describes tokenization as a potentially transformative development in financial market infrastructure. In its vision of a \u201cUnified Ledger,\u201d<\/a> tokenized central bank reserves, commercial bank money, and financial assets could interact with one another on a programmable infrastructure<\/a>. And this discussion has since progressed further. In March 2026, the Eurosystem presented its Appia Roadmap<\/a>. The goal is to develop a European tokenized financial ecosystem in which central bank money<\/a> continues to serve as the monetary anchor. The initiative is set to be further developed by 2028<\/a> and is intended to bring together both public and private market participants.<\/p>\n\n\n\n

Things became even more concrete with Project Agor\u00e1<\/a>. In May 2026, the BIS<\/a> reported that a prototype had demonstrated how tokenized central bank reserves and tokenized commercial bank deposits could support cross-border wholesale payments<\/a>. Work is now set to continue toward transactions involving real-world assets (BIS, 2026). This is noteworthy. It means the discussion has moved somewhat away from the original crypto narrative.<\/p>\n\n\n\n

Today, the question is no longer simply whether blockchain can make certain financial transactions faster or cheaper. The bigger question is: What happens to a financial system when money, assets, and contractual logic become programmable? For insurers, this is a pivotal transition. After all, insurance companies do not wait until new market structures are fully established before responding to change. They must assess risks while these structures are still emerging.<\/p>\n\n\n\n

The most interesting question is not a technological one<\/strong><\/h6>\n\n\n\n

In my dissertation, \u201cFrom Code to Capital: A Study of How Emerging Technologies Shape Stock Markets\u201d<\/a> I have been examining the impact of emerging technologies on financial markets. One perspective that has emerged from this research seems particularly relevant to today\u2019s discussion on tokenization: The economic impact of a technology cannot be derived solely from its technical capabilities. There is a crucial factor that lies between a technological possibility and its actual adoption: the expectations of market participants. Technological innovation therefore does not initially create efficiency alone. It also creates uncertainty. And uncertainty influences markets. That is precisely why, when it comes to tokenization, I am less interested in the question of whether a token can technically function. Far more intriguing is the question: When will market participants begin to align their behavior with this new infrastructure? For it is at that moment that technology becomes economic reality.<\/p>\n\n\n\n

The Illusion of Automatic Liquidity<\/strong><\/h6>\n\n\n\n

Let\u2019s take our real estate example again. So far, it\u2019s been difficult to sell a share of it. A token could significantly simplify this process from a technical standpoint. Perhaps in the future, an investor will be able to purchase a small share and transfer it at virtually any time. That sounds like liquidity. But is it really? It\u2019s worth taking a closer look. Technically, a token can be transferable around the clock. That by no means implies that a buyer is available at all times. It requires a functioning market, price discovery, and trust, as well as a sufficient number of market participants.<\/p>\n\n\n\n

It is precisely this distinction that has now become apparent in international research as well. The International Monetary Fund<\/a> (IMF) concludes that tokenization can reduce certain inefficiencies in the life cycle of financial assets. At the same time, however, new inefficiencies and risks may arise\u2014for example, due to greater interconnectedness, smaller liquidity buffers, higher debt, faulty code, or increased Concentration of Market Infrastructure<\/a>. This means we need to put the attractive idea of tokenization into perspective: While tokenization can create tradability, it does not automatically create a market. For an insurer, this is not an academic distinction. Valuation and liquidity are central components of risk management. When an insurer holds a tokenized asset, it must not only know that the asset is technically transferable; it must also know the asset\u2019s actual value in a stress scenario. And this is precisely where technology and traditional financial market risks converge.<\/p>\n\n\n\n

What does the investor actually own?<\/strong><\/h6>\n\n\n\n

The question becomes even more fundamental when we shift our focus from the market to the law. A token can represent a stock, a bond, a fund share, or a claim to a real asset. However, the token itself is not automatically equivalent to the economic or legal claim.<\/p>\n\n\n\n

At first glance, this sounds trivial. But it isn\u2019t. Because the more financial assets are represented digitally, the more important the connection between technical representation and legal reality becomes. A smart contract can automatically execute a transfer. But it cannot decide on its own whether the underlying claim is legally enforceable. A ledger can unambiguously document a transaction. However, it does not automatically answer the question of who is the owner in the event of a dispute. This creates an interesting tension: The technology can make a transaction unambiguous, while the legal significance of that transaction may still remain complex. This is central to the insurance industry. After all, insurance does not protect code; it protects an economic interest.<\/p>\n\n\n\n

Risk doesn’t disappear. It just shifts.<\/strong><\/h6>\n\n\n\n

Perhaps this is the most important insight for insurers. Tokenization will not simply make risks disappear. It will, in part, shift them. A traditional asset carries known risks. When it is tokenized, additional risks may arise: cyber risks, smart contract risks, data and oracle risks, custody issues, or dependencies on specific digital infrastructures. The IMF points out precisely this ambivalence: The greater integration and programmability of tokenized <\/a>financial markets can enable efficiency gains, but at the same time can also create new interconnections and concentrations, as well as technical risks. In 2026, the BIS<\/a> also emphasized that digital innovation creates new macroprudential challenges and brings the question of maintaining trust in money and financial infrastructure to the forefront. This changes the insurer\u2019s role. The insurer must not only ask, \u201cWhat could go wrong here?\u201d but must increasingly ask, \u201cOn which infrastructure could something go wrong?\u201d <\/p>\n\n\n\n

That’s a small linguistic difference. But it could make a big difference for future underwriting.<\/p>\n\n\n\n

And suddenly, the broker becomes interesting<\/strong><\/h6>\n\n\n\n

This is precisely where I see a unique opportunity for brokers. In a tokenized financial world, brokers could take on a new intermediary role. On one side is the client with their assets and financial interests. On the other side are insurers, reinsurers, and potentially the capital markets. In between lies a new layer: digital infrastructure. The broker may then need to understand not only what is to be insured, but also how the underlying asset is structured from a technical and legal perspective. In the future, a client might no longer simply ask, \u201cIs my asset insured?\u201d but rather, \u201cWhat happens to my insurance claim if the digital infrastructure fails?\u201d Or: \u201cWhat happens if the token is tradable but the underlying market collapses?\u201d Or: \u201cWho bears the risk of an error in the smart contract?\u201d As a result, technology does not become an additional specialty alongside insurance. It becomes part of the risk description itself.<\/p>\n\n\n\n

Trust Becomes the Crucial Issue<\/strong><\/h6>\n\n\n\n

And that brings us to a point that, in my view, is even more important than blockchain or tokenization itself: trust. The insurance business is based on trust. The customer trusts that his claim will be honored in the event of a loss. The insurer relies on data. The reinsurer relies on the primary insurer\u2019s risk models. The investor trusts in the functionality of the financial market infrastructure. Tokenization can technically support certain elements of this trust. It can make processes more transparent. It can synchronize information. It can automate certain workflows. But it does not replace trust. A token can function perfectly from a technical standpoint and still represent a claim that is economically or legally unclear.<\/p>\n\n\n\n

That is why I would not view tokenization as a substitute for trust. Rather, it could become part of a new trust infrastructure. This is also interesting because the BIS itself <\/a>explicitly links the future of the tokenized financial world to maintaining trust in money and institutional structures. <\/p>\n\n\n\n

What comes next?<\/strong><\/h6>\n\n\n\n

This puts us at an unusual juncture. The technology has advanced far enough that central banks, international institutions, and major financial market participants are exploring specific infrastructures and applications.<\/p>\n\n\n\n

At the same time, it is by no means certain which models will be economically successful. It is precisely this combination of technological progress and lingering uncertainty that makes tokenization so interesting. Perhaps it will fundamentally transform the financial market infrastructure. Perhaps certain applications will prevail, while others will disappear. Perhaps the technology will ultimately prove less revolutionary than is currently expected. But even then, one important question remains: What do we learn about risk when the infrastructure on which value is created and transferred changes? For the insurance industry, this could be where the real opportunity lies. Not in tokenizing every asset as quickly as possible, but in understanding sooner than others which risks\u2014and which new forms of value and trust\u2014emerge from this process. The crucial question, therefore, is not: Who will tokenize first? But rather: Who will understand first how risk, value, and trust are transformed by this process?<\/p>\n\n\n\n

Laura Arenas<\/p>\n\n\n\n

Laura Arenas<\/strong> is an internationally experienced executive specializing in risk and digital resilience, as well as a researcher and author. She helps organizations navigate risks associated with digital and emerging technologies, strengthen resilience, and safely manage transformation. With over 10 years of international experience at leading financial and technology companies, she combines industry practice, research, and strategic decision-making. Laura earned her Ph.D. in business administration with honors (cum laude) and received the Extraordinary Doctorate Award for the best dissertation. In 2025, she was honored by Risky Women as a \u201cWoman to Watch.\u201d She is also a member of the Executive Committee of Global Women in AI and has served as a Global Ambassador for Women in AI since 2025.<\/p>\n\n\n\n

See also: Beyond Profit: Building a People-Centered Economy in a World Obsessed with Money<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

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