Experts warn on simplistic approach to vendor risk

Magnitude of exposures "very difficult" to size

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Insurance firms can outsource activity but not responsibility

Today's business environment encourages insurers to use third parties to provide products, systems and services. Globalisation, increasing specialisation, complexity of products and processes, a focus on core skills, as well as competitive pressure and the need to reduce costs all drive insurers to look to outside suppliers. But while third parties can solve many problems, they bring their own risks. This fact has not escaped the regulators, and current rules make it clear that, while firms can