Operational Risk

  • 2005 02 - SOA - Operational Risk, by Michel Rochette, The Actuary, Society of Actuaries - [link]

  • 2008 - SOA - A New Approach for Managing Operational Risk: Addressing the Issues Underlying the 2008 Global Financial Crisis, Society of Actuaries - 91p
  • Operational risk increases significantly when an organization experiences rapid growth.
  • Growth typically involves new markets and/or products and new people in the organization.
    • That usually puts significant pressure on the systems in place and on the control system. (p9)

--  International Actuarial Association

-- 6.14 Operational risk - Q205

Compiled Comments on Risk-based Global Insurance Capital Standard Version 1.0 Public Consultation Document 19 July 2016 – 19 October 2016 - 22p

  • Operational risk
  • 57. Operational difficulties and business transition issues at insurers generally have not caused serious market disruptions in the past and have not raised financial stability issues.
    • However, operational difficulties and business transition issues could potentially become a financial stability concern if they were to materialise during stressed market conditions, depending on the nature and scope of the activities of the affected firms.
    • Insurers are exposed to a number of operational risks, which may have significant impacts on their business and in an extreme case could also cause disruptions to broader markets.
      • Similar to asset managers, another example of where operational difficulties at an insurer may have systemic implications is when an insurer, which itself may be under stress, faces the need
        to transfer policies during stressed market conditions.

2017 1208 - IAIS - Activities-Based Approach to Systemic Risk - 62p

  • 2. Heard a Presentation from the Operational Risk Consortium John Simone (Operational Risk Consortium—ORIC)
    • The definition of operation risk management would include any issues regarding people or governance as it pertains to oversight, technology, infrastructure, business continuity management, outsourcing, mis-selling, data protection, or transaction processing and products.
    • He explained that this is a broad definition, which makes it difficult to quantify because of the vast amount of variables involved, and is people-driven with a large amount of technology included, which makes it difficult to measure.
    • Operational risk also includes legal risks.  (10-596)

2012-3, NAIC Proceedings