Zurich fined £2m for loss of customers' personal data

Zurich Insurance was today fined £2.3 million by the Financial Services Authority for losing a data tape containing personal details of 46,000 British customers on its way to a sister company in South Africa.

The fine imposed on the British arm of the Swiss financial services giant is the FSA's second-largest after a series of losses of personal data by large companies. HSBC was fined a total of £3 million last year and Norwich Union was fined £1.3 million.

Margaret Cole, head of enforcement at the UK watchdog, said: "Zurich UK let its customers down badly. It failed to oversee its outsourcing arrangement effectively and did not have full control over the data being processed in South Africa. To make matters worse, Zurich UK was oblivious to the data loss incident until a year later."

Stephen Lewis, chief executive of Zurich Insurance UK, said: "This incident was unacceptable. It served to remind us of the need to strive continually to improve the ways we seek to protect our customers' data."

Zurich said there was no evidence that customer information had been compromised or misused.

The group has appointed KPMG to review its data security systems and is taking steps to improve them.

"We are appointing a dedicated information security officer to provide ongoing assurance that appropriate measures are in place and that they will continue to be effective," said Lewis.

"We believe our customers can be confident that we are doing everything we can to keep their data secure and protected.

"The FSA has acknowledged that we fully cooperated with its investigation and recognised that we treated the incident with utmost seriousness and have demonstrated a commitment to take the necessary steps to ensure the ongoing security of our customer data."