Insurance for Banks
Banking institutions as custodians of large assets are built on the trust of their customers. Furthermore, banks are subject to the most stringent of regulatory environments with high requirements regarding risk management and increasing capital demands.
The ability to control operational risk is a corner stone of a bank's reputation. Insurance solutions can mitigate the financial consequences from operational risk. And, insurance can be used to cost efficiently relieve the bank's capital structure.
Insurance Solutions
The business model of banks requires tailor-made insurance policies part of a well co-ordinated program: Professional liability and fidelity insurance (e.g. the banker's blanket bond) protect the company's assets. The D&O liability insurance can protect both, the personal assets of directors and officers as well as the balance sheet of the company.
The insurance market offers a wide range of risk transfer products to banks and other financial institutions that mitigate the impact of these risks to the bottom line, ranging from established policies such as crime and professional indemnity to cutting edge capital mitigation solutions such as insurance for political risk and credit risk.
Bank-Specific Exposure
Risks abound where money is stored and moved. Insufficient security measures threaten the business of the bank and the assets of the customer.
Banks that hold an independent fund management company may be unaware that the insurance solutions designed for banks are not well suited to insure the fund management business. Such fund manager may suffer significant insurance gaps, which are often only detected in the event of an otherwise insured loss.
The internal fraud risk increases with increasing number of employees. At the same time the ability to overview decreases with growing IT complexity. IT systems of banks that are interconnected with a wide range of market participants run the risk of external attacks. Internal and external attacks on sensitive areas are becoming more sophisticated.
Hence, banks are more exposed than other businesses to the risk from fraud, embezzlement, extortion and other criminal offences. For example, the following areas exhibit a bank specific loss potential:
- misappropriation of funds by its own staff (often lasting over several years)
- trading of funds on customer accounts for the purpose of personal gain
- speculative trading of securities for own account
- fraudulent lending (including high loans to third parties in connection with bribes)
- fraudulent instructions regarding the transfer of funds and other assets
- fraudulent activities related to external asset managers
- computer abuse by its own staff or third parties (e.g. "hackers")
- extortion or kidnapping of bank employees
- cyber risks relating to e-banking, cloud computing, or the use of mobile devices.
Without proper insurance in place, directors, officers and professionals could find the firm's equity and even their personal assets at stake should claims arise. And, given the risk of liability, they may be reluctant to accepting certain positions.
WALKER RISK SOLUTION has developed a methodology, which matches the client specific risk profile with insurance solutions available in Switzerland or in the London insurance market. This approach enables bespoke solutions that protect the client from financial loss arising from a variety of financial, operational, legal or regulatory risks.
Our clients are experts at what their industry is. We are experts at how to design insurance programs and manage the insurance markets to bring about the best results.
WALKER RISK SOLUTION LTD
Bespoke Insurance Solutions for the Financial Sector
Expertise - Client Focus - Independence