Actuaries and Operational Risk Management

This presentation, based on the AAE Discussion Paper “Actuaries and Operational Risk Management”, explores skills and techniques actuaries can bring to operational risk management. We argue that actuaries are well placed to assist in this area of risk management (as in other areas). We set out desirable skills for individuals involved in this field and map these against skills that actuaries may have. We review how operational risk fits into insurer own risk and solvency assessments and pension fund own risk assessments. We explore a range of related topics such as ways of capturing the wisdom of experts, quantitative techniques commonly applied to operational risk measurement and management, operational risk stress testing disciplines, how best to cope with limited data and how best to set operational risk appetite. We also discuss how to promote operational resilience and a healthy operational risk culture.