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Chubb Taps Into Wealth Managers' Risk Needs With New Offering
Tom Burroughes
19 December 2019
, the US-based insurance and risk management group, has tapped into the risks faced by asset management firms. It has launched the Financial Institution Bond for Asset Managers, aka financial fidelity bond. The insurance product is designed to monitor risks causing clients to lose capital, such as employee fraud, computer hacking, impersonation of clients, counterparties and company bosses. The firm said the fidelity bond was brought out to tackle new risks associated with advancements in technology used by advisors to manage assets. The stakes are high: A 2017 PwC report on the future of the asset and wealth management industry, said that assets under management globally are expected to exceed $145 trillion by 2025. "The asset management industry is growing at a rapid pace, and safeguarding customer capital is top of mind for asset managers," said Michael Mollica, executive vice president, Chubb North America Financial Lines, said. "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." In its product launch statement, Chubb also quoted figures from The Financial Crimes Enforcement Network showing that since 2016, there have been more than $9 billion in possible losses affecting US financial institutions and their customers as a result of business email compromise schemes. The new offering handles risks that might not be covered under present policies, such as financial losses caused by hackers; unauthorized access to a firm's network, including mobile applications and customer web portals; transfer of the firm's capital or its customers' capital through fraudulent instructions over the Internet, email or telephone; and, impersonation of an employee or known vendor that causes the firm's funds to be fraudulently transferred by an authorised employee.