Management Of Operational Risks In Insurance - Current Situation, Trends And Benchmarks When Dealing With Operational Risks, Part 1

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Management Of Operational Risks In Insurance - Current Situation, Trends And Benchmarks When Dealing With Operational Risks, Part 1

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PREFACE

Globalization as well as technical, political and social changes

are resulting in insurance companies being increasingly exposed to

greater and more complex risks. Thus, to successfully operate in

the market, insurers are being compelled to take considered and

controlled risks. Consequently, their need for active risk

management is increasing.

Within the framework of active risk management, the subject of

"operational risks" (OpRisk) is increasingly growing in

relevance for insurance companies. In addition to new value-adding

strategies, such as outsourcing/offshoring or the necessity of

comprehensive risk management in terms of Enterprise Risk

Management (ERM), there are first and foremost regulatory demands

(e.g. Solvency II, Swiss Solvency Test and the Sarbanes-Oxley Act),

which require to manage this risk category. These legal regulations

are at present in the initial stages of development and have

partially still not been specified in detail with regard to

concrete requirements. For numerous insurance companies, the

resulting leeway with reference to the development of Operational

Risk Management (ORM) thus leads to the need for intensive and

detailed contemplation and discussion around the subject of

OpRisk.

During the course of these developments, insurers will be faced

with the following questions:

What driving factors led to the introduction of ORM?

What is the understanding of OpRisk?

What components of the ORM framework have been implemented and

how are responsibilities assigned?

What developments can be expected and where is potential for

improvement?

The present study will provide positive answers to these

questions. Furthermore, the results serve to derive recommendations

for action by management. The study serves as a contribution to the

discussion and provides kno...

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