The Operational Risk / Insurance Risk boundary is an important concept for the way that firms collect and analyse risk data. KPMG and ORX research suggests that the industry would benefit from greater consistency in approaches taken by firms.
ORX partnered with KPMG to research the definition and management of the operational risk / insurance risk boundary, along with 16 leading insurers from Europe, North America and Australia.
The definition of the boundary has been identified as a fundamental issue in the collection and modelling of operational risk loss data. The research analysed the range of practices and approaches across the industry and proposed a clear definition that would allow consistency of data collection, which should lead to improved risk management and measurement of both operational and insurance risk.
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