There's already DeFi insurance project that focus on smart contract security like Etherisc^[1], Nexus Mutual^[2] and Opyn^[3]. I believe too that insurance is a must on DeFi since all funds of investors are placed on smart contract which has a risk for potential potential bug like what happened on DAO. DeFi is the real threat to banking system and I believe they might
be adopt by banks. Replacing banks is a bit delusional because they are not idiot to be left behind.

[1]Etherisc - https://etherisc.com/
[2]Nexus Mutual - https://nexusmutual.io/
[3]Opyn - https://opyn.co/#/