How Solvency II Impacts Operational Risk Management
John Kelly 270004J7VQ firstname.lastname@example.org | | 0 Comments | 250 Visits
Businesses have always been engaged in managing risk, but it has taken an unprecedented wave of regulatory oversight to convince many organizations how inadequate their risk management policies and procedures really are.
The UK’s Financial Services Authority, in a May 2009 policy document, Insurance Risk Management: The Path to Solvency II, warned that “the risks of not developing detailed plans for Solvency II implementation are great.
Firms should have completed or be in the process of completing a detailed gap analysis to identify any shortfalls in expected compliance with the emerging Solvency II requirements, as they bear on their operations.”
A gap analysis should evaluate the current state of an insurer’s risk management system against current risk standards and the desired state. The organization then must develop a roadmap on how to achieve that desired state. Organizations need to evaluate their entire risk management system and how all of its risk areas are being managed.
Given that executive management is charged with ownership of operational risk management and the need to embed it within the organization, many companies are turning to integrated risk management solutions to better understand and proactively manage the risks that can impact the business.
For more information on Solvency II and meeting the Solvency II operational risk challenge, check out this white paper.