Cash Handling Insurance – the buyer’s perspective

Marek Porczyński, Marsh Sp. z o.o.

Paul Martin, Marsh Ltd

Agenda

• Marsh introduction

• The criminal “arms race” in Europe

• Cash handling insurance coverage– Good and bad

• Selection of insurers

• The insurer’s view

The businesses of MMC

• Risk and insurance services– Marsh is the world leader in delivering risk and insurance

services and solutions to clients – Guy Carpenter is the world's leading risk and reinsurance

specialist, creating and executing reinsurance and risk management solutions for clients worldwide

• Risk consulting and technology– Kroll, the world's leading risk consulting company, provides a

wide range of investigative, intelligence, financial, security and technology services to help clients solve problems and capitalize on opportunities

• Consulting – Mercer HR Consulting is a global leader for HR and related

financial advice, products and services– Mercer Specialty Consulting

Marsh in Poland

• Since June 1992 has obtained a license for insurance and reinsurance services

• The leading insurance broker in Poland by turnover and number of clients

• Five offices: in Warsaw, Cracow, Wroclaw, Poznan and Gdansk at your service

• 82 people working for Marsh in Poland, 54 professional brokers

• Renders services to 1200 local and multinational clients

Marsh – our credentials

• Members of ESTA • Market leaders in insurance for cash

handling companies and financial services Industry

• Client base:-– Largest global companies– Largest independents in France, Germany,

Switzerland, Norway and North America

• Industry knowledge & experience

ESTA – European Loss Data1998-2005

38,389,023 36,012,407

81,282,815 80,777,785

70,952,81073,536,095

96,501,113

54,753,550

624

730

908

1,0321,090

1,048

1,143 1,154

-

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

1998 1999 2000 2001 2002 2003 2004 2005

Val

ue o

f Lo

sses

EU

R

-

500

1,000

1,500

2,000

2,500

No.

Att

acks

Value of Losses No. of Attacks

ESTA – European Loss Analysis 2005

Area of Attack Total Attacks Total Loss EUR M

Cross Pavement 862 22.4

Vehicle 99 34.2

ATM Replenishment 180 14.8

Operating Centre 13 25.1

Case Study – Sweden

Plantequipmentbreachesperimetervehiclegates

Attacker

pulls a bagof cashthrough

thedespatchwindow

Plant

equipmentbreaches

loading baydoor and

ramsdespatch

wall

Attackersremovebags of

cash frombranch

Case Study – Sweden

Tiger Kidnap UK, Tonbridge – 21 & 22/02/2006

Building andvehicle entrance

Control room andloading bays

Robbers andhostage arrive

in a white Renaulttruck followed byaccomplices in a

car

Renault truck isreversed into

loading bay

ESTA data – Attacks per Country 2004/2005

Pos. 2005 Pos. 2004 CountryNumber of

Attacks

1 1 United Kingdom 832

2 2 France 76

3 6 Sweden 52

4 5 Portugal 46

5 3 Ireland 34

6 - Poland 25

7 4 Italy 24

8 7 Germany 14

9 8 Netherlands 12

10 9 Greece 9

11 - All Others 30

Exposures faced

• Armed Robbery

• Tiger Kidnap

• Infidelity– Physical cash– Electronic payments

• “Mysterious unexplained disappearance”

• Terrorism

• Acts of God

Cash Handling Insurance Policies -Characteristics of good quality product

• Specialist cover for cash handling operations• All risks of physical loss or damage • Sum insured not reduced by claims• No possibility of cancelling the Policy• No restrictions on operations• Extension for electronic funds transfer exposure

“Less is more!”

Good quality product

• Minimal Policy Exclusions:– War on land– Terrorist attack – on premises only

• Not theft by terrorists

– Radioactive Contamination, Chemical, Biological, Bio-chemical And Electromagnetic Weapons

– Theft by owners or board directors of the CIT company

Poor quality product

• Limits within the Policy for:– Each type of vehicle – Number of guards– Across the pavement– ATM service– Specific locations

Poor quality product

• Claim only covered if:– CIT industry rules obeyed– Internal procedures complied with– Security levels not changed without

permission– Operating limits not increased without

permission– Investments in security made as required by

the insurer– Claims reported within a time limit

Selection of Insurers

• Best price (?)

• Good credit rating

• Expertise in CIT industry

• Flexible approach

• Fast claims response

• Long term view

What is the insurer looking for?

• Professional culture

• Strong management control

• Effective security team

• Capital investment in security

• Good loss record

• Insurers will give long term support to professional CIT companies

The information contained herein is based on sources we believe reliable, but we do not guarantee its accuracy, and it should be understood to be general insurance information only. Marsh makes no representations or warranties, expressed or implied, concerning the financial condition, solvency, or application of policy wordings of insurers or reinsurers. The information is not intended to be taken as advice with respect to any individual situation and cannot be relied upon as such. Insureds should consult their insurance advisers with respect to individual coverage issues.

This document or any portion of the information it contains may not be copied or reproduced in any form without the permission of Marsh Ltd, except that clients of Marsh Ltd need not obtain such permission when using this report for their internal purposes.

© Copyright 2007 Marsh Ltd All rights reservedMarsh Ltd is authorised and regulated by the Financial Services Authority.