According to Chubb, the new fidelity insurance solution offers modernised coverage for a variety of risks associated with loss of customer capital
Chubb has launched Financial Institution Bond for Asset Managers, a new financial fidelity insurance solution, designed for addressing the different types of risks faced by the modern-day asset managers.
According to the insurance company, the new financial fidelity bond offers modernised coverage for a variety of risks that can lead to loss of customer capital. The company said that these types of risks often originate from fraudulent activities of employees, hacking of computers, and impersonation of clients, executives, and counterparties.
Chubb further said that it had designed the new fidelity bond in response to the varying risks related to advancements in technology used by advisers in asset management.
The insurance company said that a 2017 PwC report on the future of the asset and wealth management industry shows that assets under management across the world are likely to cross $145 trillion by 2025.
Chubb North America financial lines executive vice president Michael Mollica said: “The asset management industry is growing at a rapid pace, and safeguarding customer capital is top of mind for asset managers.
“Given today’s digital environment, it has never been more critical for asset management firms to ensure they have the right coverage in place to address a range of new risks.”
As per The Financial Crimes Enforcement Network, US financial institutions and their customers have been hit with more than $9bn in potential losses since 2016 due to business email compromise schemes.
Features of the new fidelity insurance solution from Chubb
Chubb said that its new financial fidelity insurance solution gives an extra layer of protection for exposures that may not have coverage under existing policies.
The new fidelity insurance solution gives coverage to financial loss caused by unauthorised access to a firm’s computer systems by hackers, including the use of viruses and malware. It also covers unauthorised access to a firm’s network using mobile applications, customer web portals, and others.
Another aspect covered under Financial Institution Bond for Asset Managers is the transfer of the firm’s capital or its customers’ capital using fraudulent instructions over the internet, email or telephone.
Chubb in the new insurance solution has also included coverage for impersonation of an employee or known vendor that leads to the company’s funds transferred fraudulently by an authorised employee.