How do you deal with operational risk? A survey of risk management practices in the German insurance sector

Abstract

This paper surveys the status quo of operational risk management in German insurance companies with respect to strategies followed, processes implemented and instruments used. Moreover, it provides insights into incumbent risk managers’ views on current and future regulation of the risk management process. The findings contribute to current discussions regarding the national implementation and interpretation of the European Solvency II directive by highlighting similarities and differences in dealing with operational risk within the German insurance sector. In particular, the results may be useful to risk managers as a point of reference when assessing the adequacy of their own company’s risk management strategies, instruments and processes.