The Financial Crisis of 2008 and Subsequent Market Changes
The Business Case for Insurers to Adopt Operational Risk Management
Insurance: Its Products, Services and Business Operations
Insurers’ Operational Risk Governance and Framework
External Loss Data
Risk and Control Assessments
Reporting and Analysis
The Past, the Present and the Future of Operational Risk Modelling
The Insurance Landscape
Three Lines of Defence
Since the mid-2000s in the financial markets, if we look back we see the inherent risks that were previously present in the financial system crystallising. The degree to which these risks were evident will vary from firm to firm and person to person, as to when the full potential impact was realised. Certainly, the crash of Lehman Brothers on September 15 200811 See http://www.investopedia.com/articles/economics/09/lehman-brothers-collapse.asp – sourced April 2017. was, perhaps, the greatest “wake-up call” that the financial markets had seen since the Great Depression of 1929.
The changes that we have seen since have been significant, both regulatory and commercial. In this chapter, we examine some of the major influences and alterations in regulations and practices in the 21st century, some predating the 2008 crash and some as a consequence of it.
We will examine the main regulatory influences, including Solvency II, and consider the changes in the way that regulators and related bodies cooperate. We will look at some of the market practices that have diminished and how some roles, such as compliance, have come to the fore. The financial crisis of 2008 led to