Cash in Transit and ATMs

Following on from last year’s Cash in Transit market update we are continuing to see the Cash in Transit and ATM business adapt and evolve.

During a year of Covid where in many territories Cash usage may have reduced, the Cash in Transit industry still remains a fundamental component to the fabric of society.

When talking to various firms across the globe one of their challenges has been getting employees back to work after lock downs across various countries following the support of various government furlough/welfare schemes.

Maintaining the high levels of security to protect the prized asset of cash is at the heart of this industry. Technology has supported the Cash in Transit industry for several years now, and has continued to do so throughout the pandemic, this has certainly helped some firms when they have faced the challenges of less personnel being available during the pandemic.

A sub set of the Cash in Transit industry is the shipping of high valuable goods. This industry has also had to adapt over the past twelve to fifteen months. In a more typical year many of these firms would be going about their business shipping currency and precious commodities whilst using commercial passenger aircraft. However due to a significant fall in air travel, other methods have been sought. In many cases these firms have had to change from using commercial passenger aircraft to either Cargo planes or in some cases chartering planes to fulfil customer requirements and needs. Those firms that are able to adapt and be nimble in this environment have thrived despite the disruption COVID 19 has caused.    

The industry has shown it can continue to adapt in other ways too, through offering services to different parts of the Cash sector which includes a thriving ATM sector.

The ATM sector itself has seen many changes in the past year, with some major consolidation and acquisition taking place or in the process of taking place. These acquisitions are at the very early stages or in some cases not yet near completion, so it will probably be a couple of years before we see the real impact of the coming together of some of these firms.  

A great example of how the Cash industry and the ATM industry evolves is the continuing emergence of Bitcoins ATMs, which has reportedly grown from 2300 Bitcoin ATMs across the US in January 2018 and is now in the region of 10,000 - Growing 177% in the past year.  It’s estimated the total number of ATM’s in the US stands at 470,000 of which independent owned ATM’s represent about 60%, with Bank owned ATMs being 40%[1].These figures show how much further the Bitcoin/Crypto ATM can grow with the increasing use of cryptocurrencies. Those Cash in Transit firms that can modify and adapt, may have a further market to service.

So with all these changes taking place, how is the insurance market reacting to the industries? We would suggest on the whole, positively. The Specie Market that support each of these industries remains robust. The insurers within it, remain open minded to these new emerging exposures and are willing to utilise the knowledge and experience they have gained over many years of writing business to ensure the products being offered also adapt and change to an evolving client base and their risks.  The Cash in Transit insurance sector as a whole has certainly suffered some large loss events in the past 24/36 months across many parts of the world, including France, Switzerland, South Africa and into Latin America.

Having said this the insurance market has remained consistent throughout this period, although the insurers are undoubtedly trying to increase premium rate in a class of business that has had a challenging loss ratio, however those risks that have a good claims history and are demonstrating a keen eye for risk management and loss prevention, are certainly being looked upon favourably, as one would expect.

Throughout this period of change with so many moving parts to consider, creating a clear strategy that allows for choice and options in this environment remains key. Starting the process with plenty of time and sticking to a timeline will reduce any uncertainly along the process of obtaining a fair market analysis.