NEW YORK, Nov. 27, 2018 /PRNewswire/ -- Hiscox, the
international specialist insurer, today released the 2018 Hiscox
Embezzlement Study™: An Insider's View of Employee Theft, which
found that 79% of embezzlement cases involved two or more people.
The study also revealed that 70% of embezzlement schemes were
carried out for more than one year.
This is the fourth iteration of the annual Hiscox Embezzlement
Study. The 2018 study surveyed a targeted group of chief financial
officers and professionals in accounting or controller roles who
have worked in a company where embezzlement has occurred.
"By surveying a select group of individuals who have experienced
embezzlement firsthand, we were able to learn revealing information
about the prevalence and impact of employee theft," said
Doug Karpp, Crime & Fidelity
Product Head at Hiscox. "This is a pervasive issue for companies of
all sizes, and the goal of our study is to underscore the
importance of having a plan in place to protect a business, its
employees and its customers from the far-reaching repercussions of
embezzlement."
The Real Cost of Embezzlement
The study revealed that the average amount embezzled was
$357,650. Unfortunately, those
companies only recovered 39% of the embezzled funds, on average.
Furthermore, 39% of those who experienced an embezzlement saw more
than one case in their careers.
When an employee is on the take, a company has much more at risk
than just the funds being stolen. Nearly one-third (29%) of
companies were forced to lay off employees as a result of an
embezzlement scheme, and over one-quarter (26%) lost customers.
Embezzlers Behind the Scenes
Embezzlement comes in all shapes and sizes and can be difficult
to spot, even cropping up where businesses may least suspect it.
While the majority of schemes are carried out by a team of more
than one person, the average embezzler had been an employee at
their company for eight years, and 85% of cases were perpetrated by
someone at the manager level or above. One-third of embezzlers
worked in the accounting or finance department, and the most common
method of embezzlement was billing fraud, used in 18% of cases.
How Businesses Can Protect Themselves
While the survey confirmed that businesses of all sizes, and in
all industries, are vulnerable to employee theft, three-quarters of
respondents said the companies where they currently work do not
have insurance to cover embezzlement. Businesses should take the
following steps to ensure they are covered in the event they are
victimized by embezzlement:
- Prevent embezzlement before it happens by instituting a system
of checks and balances. Small businesses, for example, are more
likely to give end-to-end responsibility for a money-centric
function such as payroll to a single individual, making it easier
to steal and cover their tracks.
- Detect fraud early to keep a small instance from becoming a
larger incident; knowing what to look for is critical in spotting
an embezzler. In 65% of cases, the embezzlement scheme was
uncovered by an employee, rather than an external whistleblower,
such as an auditor, bank or law enforcement.
- Mitigate the impact to your bottom line by insuring your
business and pressing charges against the employee who steals from
your business.
Hiscox USA provides a variety
of specialty risk solutions, including a broad spectrum of
professional errors & omissions, general liability, cyber and
data security, media liability, management liability, crime, kidnap
& ransom, terrorism and commercial property insurance
products.
In the US, Hiscox is headquartered in New York, NY, with offices in Atlanta, GA; Chicago, IL; Chesapeake, VA; Dallas, TX; Las
Vegas, NV; Los Angeles, CA;
Phoenix, AZ; San Francisco, CA and White Plains, NY.
Related Materials
A full copy of the 2018 Hiscox Embezzlement Study™ can be
accessed at
https://www.hiscox.com/documents/2018-Hiscox-Embezzlement-Study.pdf.
About the 2018 Hiscox Embezzlement Study
The Hiscox Embezzlement Survey was conducted by Wakefield
Research (www.wakefieldresearch.com) among 200 US
office professionals employed full-time in chief financial officer,
controller or accounting roles, who have worked at a company where
an embezzlement has occurred. The survey was conducted between October 11th and October 18th, 2018,
using an email invitation and an online survey.
About Hiscox
Hiscox is a global specialist insurer, headquartered
in Bermuda and listed on the London Stock Exchange (LSE:
HSX). Our ambition is to be a respected specialist insurer with a
diverse portfolio by product and geography. We believe that
building balance between catastrophe-exposed business and less
volatile local specialty business gives us opportunities for
profitable growth throughout the insurance cycle. It's a
long-standing strategy which in 2017 saw the business deliver a
profit before tax (excluding foreign exchange) of £93.6 million
despite reserving net $225 million
for claims in the most costly year ever for natural
catastrophes.
The Hiscox Group employs over 2,700 people in 14 countries, and has
customers worldwide. Through the retail businesses in the UK,
Europe, Asia and the US, we offer a range of
specialist insurance for professionals and business customers as
well as homeowners. Internationally traded, bigger ticket business
and reinsurance is underwritten through Hiscox London Market and
Hiscox Re & ILS.
Our values define our business, with a focus on people, quality,
courage and excellence in execution. We pride ourselves on being
true to our word, and our award-winning claims service is testament
to that. This information is neither intended nor should be
construed to be a solicitation for the purchase of insurance by any
US person or entity or as legal, business, or insurance advice
related to the needs of any specific individual business or person.
For further information visit www.hiscox.com.
Media Contacts
Lou Casale
Hiscox USA
+1 646 442 8341
Lou.Casale@hiscox.com
Gyawu Mahama
Hiscox USA
+1 678 781 6003
Gyawu.Mahama@hiscox.com
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SOURCE Hiscox