Operational Risk is the core of all business risks and has special implications to Financial Institutions given its strong correlation with Credit Risk and other types of risk. The video above is a technical presentation delivered by Fred Barnachawy, Managing Director and CIO of DeshCap, to the C-suite of global banks and financial institutions. The presentation explains the process by which Operational Risk can be effectively hedged against through commercial insurance products. Such products are tailored to financial institutions, also known as financial institutions insurance, yet still need to be reworded and triggered independently of brokers and insurers for best value including capital relief. The following are types of financial institutions insurance:
- D&O insurance
- Professional liability insurance
- Cyber insurance
- Mortgage Impairment Insurance: protection for asset and credit risks form physical risks
- Asset management insurance
Financial Institutions Insurance Companies
Insurers that specialize and underwrite financial institutions insurance include Chubb, Travelers, AIG, Berkshire, and numerous others.
This content is independent of any content coming from insurance brokers or insurers or law firms. Commercial insurance is rarely taught in schools, and when it is it’s mostly done through the lens of brokers or insurers. There are many misconceptions around financial institutions insurance, like many other topics in commercial insurance, due to bad habits acquired through over reliance on insurance brokers or insurers or information providers who are lobbied by them. It is also important to note that insurance has both an operational aspect and a legal aspect, on which we put weights of 95% and 5% respectively in terms of importance to protecting a business and its investors (the point is that going to court to enforce coverage defeats the purpose of buying insurance, so you want to make sure that whatever insurance you buy protects your business right and pays out fast on large losses).