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11 May 2011
Old Library, Lloyd’s, One Lime Street. London. EC3M 7HA
Avantage Reply hosted a roundtable discussions at Lloyd’s, from 08:00 AM to 10:00 AM. The topic of the discussion was based on Op Risk and introduced the shared service tool.
The Solvency II Directive recognises the significant risk posed to firms from the inadequate management of Operational Risk. It requires firms to implement an effective, integrated risk management system to address this, whether applying the Standard Formula or Internal Model approach.
The challenge to firms in implementing an appropriate risk management system should not be underestimated. Depending on the level of sophistication of the firm and its existing risk management practices, the adoption of an internal model over the standard formula will also add to this challenge.
During this session, Avantage Reply highlighted some of the issues that the implementation of a suitable system colud pose to firms of different sizes. Where appropriate, Avantage Reply also drew a comparison to the banking industry and how relevant practices for operational risk measurement and management had evolved. Understanding the obstacles that firms face, Avantage Reply also presented an overview of the emerging shared services solution. This provided a cost effective alternative to help firms overcome these issues.