This case threatened a large number of people – from the customers of the financial institution to its shareholders and employees. Similar situation could negatively influence the company’s image and reputation. There was a risk that the investors would start panicking upon hearing of the case. Customers could rush to withdraw their deposits to avoid turning into the victims of unscrupulous financial management. In such cases, it is essential for companies to demonstrate to the public that regardless of the circumstances, it retains its solvency and ability to be accountable for all obligations.
Fortunately for this financial institution, its management had taken steps for timely elimination of these risk types by singing a contract with PASHA Insurance Company. Purchasing banking risks insurance policy, the company has secured itself and its customers from the unscrupulous or malicious acts of its employees among other things. Investigation determined it to be covered by the insurance, and on February 16, 2012 Pasha Insurance issued an insurance premium on reinsurance of nearly 100,000 manat.
Signing risks insurance contract by a financial institution bears two functions vital for the successful development of the company. Obviously, the first target is the reimbursement of the damage. After all, sometimes the losses can amount to hundreds of thousands or even millions of manat that might bring the organization to bankruptcy. Insurance indemnity covering these losses is a real salvation for a financial institution. Another benefit is the image of the company. Customers feel more secure if they know that insurance policy will reimburse their possible losses during emergencies.