Financial Institutions: A Challenge 20th June 2018The Financial Services industry is renowned for being challenging and it’s no different when it comes to Financial Institutions Insurance.Market conditions have certainly been choppy, with a significant increase in claims and regulations affecting all areas of the industry. Having the right team and expertise on board are imperative for profitable performance in these conditions.There’s a plethora of areas that can be difficult to navigate without the right team at the helm: cryptocurrencies, new regulations, FI cyber exposures, the rise of litigation funds in Australia, fraud within emerging markets, the list goes one. We’re having complex conversations involving these topics on a daily basis.Currently, we are seeing a marked increase in claims activity in Australia. The cause is mainly due to the presence of litigation funds seeking to profit from companies in financial distress, or firms that have restated their financials. With challenges like this being presented to us, it is important to turn to an expert legal review, to understand the potential severity to the market.Strengthening the TeamWith Lindsay McQuillian joining us as Legal Counsel in January, we’ve been able to ascertain these exposures more accurately, facilitating conversations with brokers and clients with an additional layer of authority. By adding further strength to our FI team, we have enhanced the legal aspect to our underwriting. Now, it does not come down to solely my point of view, as we can better estimate legal and, therefore, financial exposure too.And, it’s not just underwriting where Legal Counsel provides us a more robust service. With another expert opinion, we are able to assist our brokers and clients with a more nuanced strategy around settlements as we have a deeper understanding of the motivation behind plaintiff activity and litigation. Which is becoming more and more important in the industry. Having that additional layer also enables us to provide a superior claims service. Essentially, this is what a client is actually buying from us, so it’s always been important for us to excel in this area. One of our investment management clients, was sued by a former senior employee of one of their portfolio companies. Our prompt legal review and in-depth discussions with coverage counsel, the client’s own legal team and the insured, enabled us to facilitate a speedy resolution. I objective of offering a high standard of claims service, was satisfied as we alleviated the grievances of the former manager whilst keeping the insured out of further issues. Ultimately, peace of mind is what both our insureds and brokers are after. With the robust combination of underwriting, claims and legal expertise we have built at Probitas, we are able to provide that security and confidence to the challenging financial industry.