Fidelity Insurance

Internal and external attacks on sensitive areas of a financial institution have become very sophisticated. With the increasing exposure to criminal attacks, inadequate security measures may endanger not only the business and the reputation of the company, but the assets of the customers.

The internal fraud risk increases simply as the number of number of employees grows, together with higher organisational and IT complexity. The networking of IT systems of financial institutions with external market participants also carries the risk of attacks from the outside. The following areas have a relevant loss potential for financial institutions:

According to a study by KPMG in 2014, 73% of the companies surveyed are victims of economic criminal activities. Banks are more exposed to the risk from extortion, fraud, embezzlement and to other criminal offences when compared to other financial service providers.

Insurance solutions are available for all types of financial institutions and service providers. For banks the policy is often called a 'Bankers Blanket Bond' (BBB-insurance). Some fidelity insurances specifically include loss originating from computer crime.

For most companies, insurance represents one of their biggest investments and their largest source of contingent capital. The main purpose of insurance is to protect their balance sheet, and to reduce volatility in the profit and loss account following a large loss.

The challenge for insurance buyers is raising the awareness of the value of insurance beyond that of a commodity, and articulating how individual insurance covers can contribute to the financial strategy and financial modelling of the organisation.