
The use of insurance policies to mitigate operational risk 245
Also, the challenge posed by statistics should never be underestimated. When the
probability of the occurrence of certain operational risk events is very low, historical
data would tend to be poor or even non-existent. Then, risk assessment and risk
modeling may be nearly impossible – and the same is true of correct pricing for risk
coverage.
11.7 Insurers who don’t do their homework get burned
In has been a deliberate choice to bring to the reader’s attention criteria of insurability
which can turn an insured company’s operational risk into the insurer’s own technical
risk. Any insurance ...