Willis Group Holdings, the global risk advisor, insurance and reinsurance broker, today unveiled, CRIMEstar, a new commercial crime all risks wording, in response to the growing threat to businesses from fraud and other criminal activity. The policy covers businesses for losses sustained by them as a result of all types of dishonest activity or criminal damage.
Developed by Willis's Financial and Executive Risks division (FINEX), in association with a group of highly rated insurers including Allianz, AXIS and QBE, CRIMEstar moves away from the conventional approach of listing out specific crimes that are covered on an "insured perils" basis and instead adopts an "all risks" approach, providing broad, clear and transparent protection from commercial crime. The wording is just six pages long.
"The estimated cost to the UK economy of fraud each year is in excess of £30 billion and the economic downturn is putting pressure on individuals and businesses, which is fuelling an uptick in fraud as well as other criminal activity. This continues to pose a significant risk to a company's profitability. Economic crime is also becoming increasingly complex and more difficult to identify and categorise," according to Francis Kean, Executive Director of Willis's FINEX division.
"Many conventional crime policies, in trying to keep up with the changing and complex world of fraud, have themselves become overly complicated. Adopting the same approach which we followed with DARCstar - the award winning "all risks" cover for company directors - we instead started with a clean sheet of paper.
"We focused on delivering a policy which was easy to understand and where the cover was not tied or restricted to specific sub-categories of insured perils or events. These innovations are unique to CRIMEstar and greatly reduce the potential for friction in the claims settlement process."
Mark Smith, Underwriting Manager for Commercial and Financial Liability at QBE, added: "The fraudster is becoming more ingenious and motivated by the continued effects of the global financial crisis. Given the heightened risk to businesses in this environment, it is imperative that any crime insurance policy is not restricted to antiquated clauses that may not respond to sophisticated frauds perpetrated in an increasingly complex business landscape. This need is met by CRIMEstar."
Oliver Wheeler, Senior Vice President, Financial Insurance Solutions, AXIS, said: "Sometimes the pressure to cut costs results in businesses reducing the policies, procedures and controls that prevent and detect fraud. There may also be more of a motive to commit fraud during a period of austerity. In light of these factors, businesses from all sectors and of all sizes need to consider how they identify and manage these risks."
CRIMEstar follows the success of DARCstar, the "all risk" cover for company directors, which was launched two years ago. There are now in excess of 110 DARCstar placements in the insurance market.