Loss Exposure of Wells Fargo and other financial institues
Report on Exposures This paper will address three loss exposures that Wells Fargo Bank and other financial institutions may encounter. ... For each loss exposure there will be a brief discussion about the exposure, and the frequency and severity of the exposure. The paper will proceed to discuss coverage for each loss exposure. Exposure ¡V Bank Robbery Currently one of the most threatening issues that a bank has to deal with in every day operation besides check fraud is robbery. ... Robberies are the most feared loss in banking and crime insurance can help cover a bank loss in case of a robbery, where there is damage to the property or losses incurred. ... For example, if a robber destroys property that belongs to the bank or a customer, the loss will be covered by crime insurance. Money that was lost from the robbery could also be covered by the insurance, but the premium for crime insurance that includes this type of loss will be very expensive because of the likelihood and the severities of the robbery. ... A person who normally works late and turns on the alarm before he/she leaves isnt a watchperson unless he/she was hired specifically to have custody of the property and has no other duties. ... Outside the premises- The insurance covers only the robbery of a messenger or other property while outside the premises and in the custody of a messenger or armored car company. Other property is property other than money or securities (i. ... , stock and other personal property). ... Exposure ¡V Employee Theft Embezzlement is one of the most common types of fraud impacting financial institutions. Embezzlers could be found in any type of business, but they are mainly employed by financial institutions like banks. ... It¡¦s is not rare that they could be working in conspiracy with other employees or outsiders. Embezzlement could begin via extortion, or many other different type of schemes. ... The study goes on to state that most likely many other cases are not detected. The total annual loss of cash for an institution of this size was estimated at $2,500, 000. ... This type of incident is more frequent than any other type of bank crime and a reason why banks need to look at insurance options for these types of losses. The risk of fraud by bank personnel should be an ongoing concern of any financial institutions, especially large and established banks. ... „« 62% were female employees; 38% were male employees „« 66% had a high school education; 31% had some college; 3% other education „« 41% were between the ages of 20 and 25 „« 25% were between ages of 26-35 „« 82% were working as tellers „« 47% took cash „« 71% had less than 1 year of service with the bank Severity- According to IOMA¡¦s report on preventing business fraud, the incidence and severity of fraud, embezzlement, theft and sabotage rises sharply among managers especially among those involved in financial and systems work. ... The table below illustrates the annual median loss of a financial institution by position. ... Employee must show intent to cause a loss of the financial institution and to obtain a financial gain for him self or other person.