Global - AIG joins the crowdfunding market
Source: Middle East Insurance Review | Jul 2016
AIG has forayed into the fast-growing global crowdfunding investment industry by launching “Crowdfunding Fidelity”, an insurance product developed to protect investors on equity crowdfunding platforms against fraud.
According to AIG, the new product protects 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 customised 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 offer investors the AIG coverage. AIG said it engaged with Eureeca to gain a deeper understanding of the crowdfunding industry’s risks, ensuring that the product was specifically to address these needs.
Crowdfunding platforms enable innovators to bring their ideas to life and offer retail investors the opportunity to provide capital for start-ups and growth stage companies around the world. Before the development of crowdfunding, only high net worth individuals and institutional investors such as venture capital funds and private equity firms were typically offered these opportunities.
Launched in 2013 in Dubai, Eureeca focuses on providing deals from the Middle East, Europe, and Southeast Asia.