Insurers look to technology to improve operational risk management

In the absence of clear regulatory guidance, insurers are developing their own best practice for managing operational risk, and investing in the necessary technological tools that enable them to do so. Clive Davidson reports

Operational risk has received less attention from financial services organisations and their supervisors over the past decade or so compared with market and credit risk and, in the case of insurers, insurance risk. This is odd because operational risk has been responsible for many of the world’s biggest business failures and, in areas such as governance and model validation in particular, was implicated in the recent financial crisis. Operational risk continues to inflict damage on insurers in