The Operational Risk Working Party aims to assist actuaries and others in the modelling and management of operational risk. One of the key challenges in modelling operational risk is the modelling of dependencies between operational risks, and between operational and non-operational risks such as market, credit and insurance risk.
Outputs:
- Pension scheme cyber risk, joint paper with the Cyber Risk Investigation Working Party, 17 November 2020 covering pension schemes exposure to this key operational risk
- Worth the operational risk, Actuary article, 2 September 2020, by Nicole Pang of the ORWP covering emerging trends in operational risk modelling
- Joining the dots between operational and non-operational risk, Actuary article, 8 July 2020 on operational risk dependencies following up the Sessional paper below
- Operational Risk Dependencies - paper presented at Sessional event, 20 January 2020, Edinburgh
- Sessional event, 6 March 2017, Edinburgh (repeat of London March 2016)
- Good practice guide to setting inputs for operational risk models - Paper presented at Sessional event, March 2016 which generated headlines in City AM and the Actuarial Post
Other Institute and Faculty of Actuaries (IFoA) papers and resources
- IFoA Cyber Risk Investigation Working Party have produced a number of papers on cyber risk both from the point of view of general insurers’ exposure and also wider operational risk exposure to this risk
- Operational Risk Modelling, presentation of the results of a KPMG Market Survey on operational risk modelling practice to the November 2018 Life Conference
- A review of the use of complex systems applied to risk appetite and emerging risks in ERM practice, by N. Allan, N. Cantle, P. Godfrey and Y. Yin – 2011 paper which covers Bayesian Networks and other techniques which may be used for operational risk modelling and analysis
- Quantifying Operational Risk in Life Insurance Companies, 2006 paper by the Life Operational Risk Working Party (which pre-dated the ORWP)
- Quantifying Operational Risk in General Insurance Companies, 2004 paper by a GIRO Working Party
Other operational risk resources
The following may be of interest to those involved in Operational Risk modelling and management:
- ORIC International – provider of external loss data for insurers and asset managers as well as thought leadership on Operational Risk issues
- Annual Capital Benchmarking Survey Summary Report, January 2020
- Annual Capital Benchmarking Survey Summary Report, January 2020
- ORX – provider of external loss data for banks and other financial services firms, who also provide thought leadership as well as summary reports on recent loss data
- Basel Committee on Banking Supervision (BCBS) – Operational Risk links including their principles for the management of Operational Risk and the new Standardised Measurement Approach (SMA) for setting Operational Risk regulatory capital
- Note that BCBS have also issued papers on operational resilience including
- Principles for Operational Resilience, March 2021
-
Operational resilience: Impact tolerances for important business services – joint paper issued March 2021 by the Prudential Regulation Authority (PRA), the Financial Conduct Authority (FCA), and the Bank of England following their December 2019 shared policy summary and consultation papers
-
Note that the Institute and Faculty of Actuaries is not responsible for the content of third party websites.
| Chair: | Patrick Kelliher |
|---|---|
| Membership: | 9 |
| Established: | 2014 |
Related documents
-
Guidance for Member-Led Research Working Parties
9 November 2017
Contact Details
If you have ideas for cross practice research, or want more information about cross practice working parties, please refer to our Guidance for Research Working Parties or contact the Communities Team.
Filter or search events
Events calendar
-
Sessional Meeting: Covid-19 and the Effectiveness of ERM Frameworks
Online15 August 2022The purpose of this research paper is to explore enterprise risk management lessons which can be learnt from the Covid-19 pandemic in preparation for potential future pandemics as well as other “gray rhino” or “black swan” events. This paper is not intended to be an all-encompassing solution to the issues presented by Covid-19; rather, the content has been provided to help drive discussions regarding how risk management processes may need to evolve in line with the dynamic nature of the underlying risks that they sometimes need to capture.
-
Planning your answers in the online examination format
22 August 2022This webinar will discuss good exam technique, including various approaches candidates can take in managing their time completing their exams in the online format.
-
This session is for new candidates and existing candidates where we will be discussing the practical steps you need to take leading up your exam and on the day. We will be discussing how to testing the online exam platform, downloading and uploading your paper and key information from the Exam Handbook.
The exam webinar is for candidates, new to IFoA exams and returning candidates, sitting in the September 2022 exam session.
-
Balancing the short – and the long – term: the challenges of being a “sustainable” NED
6 September 2022The role of Non-Executive Directors has become increasingly challenging and critical over the past few years.
Big picture thinking, Governance knowledge, Independent mindset, Ambassador potential and Energy and commitment: these are the essential skills sought in a successful NED, according to the Chartered Governance Institute (UK & Ireland).
In parallel, Environmental, Social and Governance (ESG) criteria are increasingly key and used by investors to measure the sustainability and ethical impact of investing in an organisation.
-
Is your ESG offering a misselling risk? This innovative concept can resolve that risk
7 September 2022This webinar will cover:
• Some background on the risks of misselling in an ESG context, including the DWS case
• Achieving positive impact is a strong antidote to the risks of greenwashing or ESG misselling, however this risks having a tension with fiduciary responsibilities
• This tension can be resolved with a concept called Universal Ownership
• Under Universal ownership, investors have an appetite to make a loss in order to achieve positive impact, and yet still have no compromise on their fiduciary responsibilities
-
How do CDC pension schemes smooth members' pensions?
23 September 2022In the UK, the idea of collective defined contribution (CDC) pension schemes is gaining more attention with the launch of the Royal Mail CDC scheme, the first of its kind in the UK. Our recent research on CDC plans investigates the sources of the putative benefits of CDC schemes: the smoothing of pensions for members. Using an attribution analysis to burrow into the scheme design, the reason for the smoothing of members' pensions is explained and understood.
-
The IFoA's Infrastructure Working Party, led by Chris Lewin, will present its new introductory guide to infrastructure investment, which will be published on the IFoA web-site prior to the webinar. Those readers whose institutions have already taken the plunge into infrastructure will know that it is a highly complex and diverse field of activity. This guide does not explore all the matters which investors take into account, but it does discuss many of the more important points, including the risks and past returns, benchmarking, and ESG and SDG considerations. Attendees will be invi
-
Social Care Agenda
11 October 2022Social care reform has long been on the to-do list for successive governments over the last two decades. In February, the government’s proposed reforms to adult social care [including cap on care costs] was published. Against this backdrop of funding promise and rising National Insurance taxation, in this session we will debate the resilience of these new proposals, the impact of future demand for care services and what role for the insurance industry and the important role it has played in long-term care funding in other countries where public-private partnership works.
-
Health – Our Greatest Asset
2 November 2022Health contributes to happiness at the personal, family, community and societal level. Health, importantly underpins all our economic security. This talk will explore the drivers of our health, the measurement of health and the steps we can take to improve health – most of which lie outside the NHS.
-
GIRO Conference 2022
ACC Liverpool21 November 2022 - 23 November 2022
We are delighted to announce the return of GIRO as an in-person conference, giving you an opportunity to connect with actuaries in your practice area. Join leading experts to discuss key issues, emerging ideas, and new research across the General Insurance sector.
-
Life Conference 2022
ACC Liverpool Kings Dock Liverpool Waterfront Liverpool Merseyside L3 4FP23 November 2022 - 25 November 2022
Life Conference returns as an in-person conference in 2022, giving you an opportunity to connect with your peers and fellow actuaries in your sector, in person. You will also hear leading experts discuss key issues, emerging ideas, and new research across the Life insurance sector.
-
Mortality and morbidity risk varies by variables such as age, sex and smoking. In traditional actuarial experience analysis, these variables, and certain combinations thereof can be explored. However, with the wealth of data now available it is becoming increasingly challenging to identify the key drivers of experience and account for the interaction between different variables. A univariate approach often compares apples and pears, for example males are more likely to smoke and have larger policies than females. Likewise, variable interactions are missed unless specifically included.
