BlackRock Brings Bitcoin to Insurance

A US insurance firm may buy Bitcoin from BlackRock, which restructures the volatile asset to satisfy insurance risk rules. Delaware Life confirmed the adoption of the BlackRock US Equity Balanced Risk 12% Index into its fixed index annuity portfolio on Tuesday. This index connects digital assets to conventional insurance structures in a regulated way, enabling Bitcoin to be risk-managed.

Instead of owning BTC directly, the index combines US equities exposure from the iShares Core S&P 500 ETF with Bitcoin exposure from IBIT.

BlackRock's spot Bitcoin ETF, IBIT, launched in January 2024 and has approximately $76 billion in assets, making it the US's institutional Bitcoin entry point.

Index design emphasizes risk management. Instead of pursuing aggressive gains, it uses a 12% volatility objective to alter allocations to avoid losses. Fixed index annuities, which safeguard the original investment, need this.

Therefore, policyholders are protected from direct losses on their initial investment while receiving index-linked returns based on stocks and Bitcoin.

BlackRock provides access, ETF infrastructure, and volatility-managed framework to incorporate Bitcoin exposure into an insurance company's balance sheet.

This Matters for Insurance and Bitcoin Adoption

Delaware Life, a Group 1001 Insurance Holdings company, is the first U.S. insurer to integrate Bitcoin exposure in a fixed index annuity. Group 1001 oversees $76.4 billion in assets, therefore this is a purposeful product development by a big insurance platform, not a test. The business says this solution is a reaction to financial professionals' growing need for modern portfolio tools with retirement product risk limits.

BlackRock's initiative expands Bitcoin's presence in long-term savings and insurance while maintaining their conservative character.

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