Unique risk profiles require tailored risk management and insurance programs
More than other industries, individual fintechs differ extensively depending on their subsector, and require innovative solutions to address their unique risk profiles. For example, a payments platform and a neobank touch different types of customers, hold different amounts of personally identifiable information, and are subject to different regulatory oversight; these distinctions drive varying risk transfer decisions.
Thoroughly understanding the individual circumstances of each fintech company is crucial to the development of a suitable risk management and insurance program. An experienced risk advisor can help build a long-term and sustainable risk management program that includes risk mitigation and management actions that are supplemented by risk transfer solutions.
Further, a broker with a solid understanding of a fintech’s unique risk profile can recommend appropriate insurance solutions and connect fintechs with the carriers most likely to provide comprehensive and stable coverage. An experienced broker can also help showcase risk management strategy during carrier meetings, which could help you secure the most suitable coverage.
Why should fintechs purchase insurance?
Risk starts the minute a company is launched, irrespective of its size or its location. A single lawsuit or other unforeseen event can stall innovation and derail growth.
The right risk transfer solutions can help organizations protect against litigation and other risks. And purchasing insurance early in a company’s financing cycle can help build strong, long-term relationships with insurers. Over time, that can help you secure properly structured and broader coverage, reduce costs, and help maximise claim recoveries.
Purchasing insurance can also:
- Enhance a company’s credibility, showing prospective clients, customers, and investors that it takes security seriously.
- Help attract and retain directors and officers and employees.
- Satisfy contractual obligations.
- Protect the financial health of a company when faced with unforeseen issues.
Securing coverage early can help protect your company in the event of a future transaction (such as, an IPO, merger, or acquisition).
