In a Nutshell: The financial services industry touches nearly every person on the planet. As such, banks and credit unions are susceptible to a veritable universe of threats — threats that come in many forms. Needless to say, providing protection for these institutions with dynamic, tailored insurance coverage is an enormous undertaking. It takes organizations, like Zurich Insurance Group, with a wealth of experience and versatile offerings to meet the risk-mitigation demands of global financial institutions. With 145 years of experience behind it, Switzerland-based Zurich Insurance Group remains one of the most successful companies of its kind in the world.
As part of a multi-trillion-dollar industry, financial services institutions face their fair share of risks. Both banks and credit unions are susceptible to any number of threats stemming from credit, market, reputational, and systemic-based risks.
Since the global financial crisis of 2007-2009, financial institutions have begun to take risk management very seriously. That crisis was a systemic event, meaning that no one single bank or financial institution was affected, but rather that the entire industry felt the impacts. While some institutions survived, a number of other banks collapsed in the wake of the disaster. Not surprisingly, the institutions that tanked were often those without proper risk strategies in place.
The threat of bankruptcy is, of course, the most concerning to financial institutions, but damage to a bank or credit union’s brand or reputation is also an important consideration. The Federal Reserve Board in the US defines reputational risk as the potential loss in reputational capital based on either real or perceived losses. After the 2008 crisis, public opinion of banks suffered, as many Americans feared the entire economic system would collapse.
The insurer employs more than 54,000 people and serves customers in more than 170 countries. Zurich’s comprehensive products offer coverage for risks associated with a number of threats, financial or otherwise.
Protection for Banks and Credit Unions that Surpasses Industry Guidelines
The world of finance has changed a great deal in the last 145 years, and it’s still rapidly evolving as technology advances. The emergence of online trading and e-currencies, like Bitcoin, have only added more complexity to an already highly nuanced industry. Zurich has evolved with leading products and services to provide protection for some of the world’s largest financial institutions.
Zurich’s award-winning Customer Care Center is one such offering. The center handles over a million transactions per year, 98% of which are handled within an average of 24 hours. Zurich makes it easy for busy operations to submit claims online from any device, and adjusters are always available to address institutions’ concerns or questions.
Enterprise Risk Management (ERM) tools are also available. This includes the Total Risk Profiling (TRP) workshop that assists Zurich’s customers in developing a total risk profile. Each profile provides a structured approach for identifying, assessing, and monitoring risks and improvement actions. TRP helps ensure more consistent and efficient risk management across an entire organization by developing tailored risk profiles unique to each institution’s needs.
Zurich’s experienced financial institution threat management team has a strong understanding of the current and emerging risks facing operations of every size. Its expert support, coupled with comprehensive offerings, make Zurich a wise choice for institutions of virtually any size.
Unique Industry Experience to Offer Banks Tailored Solutions
Threats to banks come in many forms, and from as many directions — external data breaches, employee fraud, and cyber threats are just a few. Zurich offers banks a unique package, blending of more than a hundred years of experience with personalized assessments designed to help discover potential vulnerabilities.
For instance, bank executives and board members tend to carry high profiles and draw a good amount of public attention. Some of this attention is positive and largely harmless publicity, oftentimes stemming from executive members’ presence at charity events or other public assemblies. However, sometimes public attention can be negative.
Zurich’s management liability products offer insurance protection to banks — and their executives — in the event a lawsuit alleging misconduct is filed. Zurich offers more than 75 coverage augmentations to enable its clients to create a policy that is custom-designed for their institution’s specific needs. Its financial institutions select insurance combines management and professional liability into one policy with many coverage options.
Furthermore, Zurich’s protection extends beyond bank employees to protect bank’s customers, too. As anyone who’s recently accessed their checking account online knows, banks have started to take the security of their customers very seriously, and for good reason. According to a recent Javelin Strategy & Research study, identity theft and bank fraud cost consumers more than $16 billion in 2016 alone.
Because the banking industry collects and processes such a vast amount of data, it’s critical for banks to manage risk very carefully. Zurich specialists use risk foresight to help assess, mitigate, and manage risks to reduce security breaches.
To address these risks, Zurich offers third-party coverages, like security and privacy liability, as well as internet media coverage. First-party coverages are also available, like privacy breach costs, business income loss, dependent business income loss, cyber extortion threat, and reward payments.
The company offers award-winning risk management tools, such as Zurich Risk Advisor, to help institutions assess and manage potential security breach exposure. Zurich also gives clients complimentary access to eRisk Hub®, a web-based informational resource that helps reduce the risk of a security breach and recover faster if one does occur.
Credit Unions Find Peace of Mind in Zurich’s Offerings
Credit unions are not-for-profit financial cooperatives and are some of the most stable institutions in America, financial or otherwise. Credit unions are collectively owned by their members, and as such, credit unions are beholden to these members’ interests. It’s not that the risks to credit unions are somehow greater than those of banks, but credit union members tend to have a closer business relationship with these institutions. Maintaining a good rapport is very important to credit unions, and properly managing risk is one of the most important aspects of this.
Among credit unions’ most common offerings are home and real estate loans. As such, this makes up a large part of their total loan portfolio. Having appropriate physical damage and liability coverage in place to help protect their investments is essential.
Because foreclosed homes and commercial properties may sit vacant while on the market for months or years, they are vulnerable to the elements and other types of damage, like fire or vandalism. Zurich provides coverages and services to help protect these properties including fire-loss prevention and protection guidelines, and assessments for natural hazards, water, and liquid damage prevention.
Zurich also offers credit unions protections against losses related to mortgage operations. Its Mortgagee Protection Policy helps protect institutions from oversights made by both the credit union itself and its members. The policy is designed to provide the necessary insurance protection for otherwise uninsured physical damage to the mortgaged property, as well as when legal liability losses result from failure to maintain insurance or to make payments from escrow on behalf of the mortgage holder.
Flood insurance coverage is also offered in instances when there is a failure to determine whether or not a property is in a special flood hazard area. This offering should come as a welcome benefit to many, particularly for credit unions located in areas prone to hurricanes or flash floods.
Customers Have Relied on this Swiss Insurer Since 1872
As technologies, consumer habits, and various economic systems have evolved, so has Zurich Insurance Group’s service to its clients. Zurich continues to uphold its reputation as one of the most reputable insurers in the world, which tends to follow with a track record that dates back to the 19th century.
When you consider the overwhelming threats and risks financial institutions face, the true value of an insurer like Zurich begins to come into focus. From keeping money safe to developing technology that makes lives easier, the financial services industry plays a major role in lives all over the world. It’s crucial that companies like Zurich are protecting the interests of those businesses that are looking out for us.
Editorial Note: Opinions expressed here are the author's alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.