Capital Benchmarking Survey - Summary
Discover the 10 key takeaways from ORIC International's 2018 Capital Benchmarking Survey, completed by more than 20 (re)insurance and investment management firms.
Improving Third Party Risk Management
A joint study and survey between ORIC International and McKinsey & Company on the management of third party risk.
WHAT WE DO
ORIC International provides its members with unrivalled insight into operational risk within the insurance and investment management industries. This insight is based on information which is submitted by our members and shared on an anonymised and confidential basis amongst the member group, spanning several key areas of the operational landscape.
Operational risk events - ORIC International's loss database contains over 15,000 operational risk events, covering over 450 years of company history, collected from our members. All member firms have access to this database and can use the aggregated data to identify the common drivers of operational losses and near misses as well as benchmark their own risk profile against peers and the wider industry.
Scenario Assessments - ORIC International's scenario database contains over 900 scenarios submitted by members, including storylines, estimated frequencies and impacts as well as capital model outputs. These scenarios are each linked to one of over 30 ORIC International benchmark scenarios, which together describe the operational risk landscape that insurers and investment managers operate within. Member firms use this database to check for the completeness of their operational risk universe using the ORIC International benchmark scenarios, which are mapped to the ORIC risk event taxonomy to a detailed level. Our scenario best practice guide helps firms run workshops with the business to identify scenarios relevant to their strategy and risk profile.
Capital Benchmarking - ORIC International's membership includes firms using full internal models, partial internal models and the standard formula approach. Our comprehensive annual survey of these firms delves into aspects of the capital framework such as correlations, the use of internal and external loss data, and the applicability of risk mitigations such as insurance, letter of credit and contractual indemnities. Participating firms can use the survey findings to benchmark their approach to calculating operational risk capital as well as compare their capital profile against peers and the wider industry.
BEST PRACTICE AND LEADING-EDGE
Our purpose is to raise the standard of operational risk management in the industry and develop best practice. Our thought leadership draws on the collective experience and expertise of our members, coupled with the deep subject matter expertise from carefully selected strategic partners.
Topics we have addressed that have been chosen due to their relevance and importance in the day-to-day risk management activities of members, include:
Improving third party risk management
Creating value from risk events
Operational risk dependencies
Since ORIC International's creation in 2005, we have forged strong links with strategic partners, including the big four consultancies and other industry leaders. This allows us to work with the right experts on the right topics to add value to the thought leadership that ORIC International continues to develop.
STRENGTH IN NUMBERS
ORIC International's thought leadership, insights and development of best practice are driven not just by our unique data set, but also through the collaboration of our members. We run a number of working groups that tackle some of the more challenging and important topics within operational risk, such as capital modelling, cyber risk, scenario analysis and data standards.
In a confidential setting members can compare their approaches to operational risk management, including what has worked and what has needed to be developed further within their firms. This facilitates the sharing of best practice and how risk departments are evolving their ORM and ERM frameworks to support their firms' changing business models and requirements.
As well as working groups that focus on specific opportunities and challenges, we also have a Senior Leaders Forum for CROs, Heads of Risk and Senior Risk Managers in which they discuss issues in the industry. As with the working groups this forum is held under the Chatham House Rule, and members talk openly and frankly of their own experiences, challenges and success in planning and executing their risk plans and frameworks.