
216 Operational Risk Control
The premise behind prudential limits is that when risks are properly controlled they
are insurable. Yet the question still remains about their joint effect down market,
particularly in the aftermath of a huge catastrophe. Dr Thomas Hess advises that a
discussion on limits and on insurability should not only look at insured risk(s), but
also cover the assets and liabilities side (see section 10.5), most particularly the assets
risk and associated credit risk and market risk, in conjunction with the technical risk
being insured. This will give an integrative pattern for risk management.
10.4 Underwriting risk in insurance ...