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Operational Risk & Resilience (Risk (high risk (event likely to happen…
Operational Risk & Resilience
Risk
potential for an event to result in unwanted or negative consequences
combines extent of unwanted consequence
likelihood of it happening
high risk
event likely to happen and have a large impact on the organisation
greater than
event have a bigger impact but less likely to happen
more likely to happen but have less impact
Resilience
individual and organisational level
respond & withstand unwanted events
avoiding event or minimizing impact primary solution
next is to be able to cope with consequences and recover from them
Hazards
any unwanted consequences for an organisation
From supply chains
human capital
technology
customers
organisational
Impact
considering different parts of the organisation which may be impacted by hazard
using a detailed framework to bring consistency to how risk is determined across the business
impact matrix
Likelihood
challenging task
multiple sources of info can be used
evidence to justify assessment of probability that something will happen
use a matrix to standardise evaluation across business
Managing risk
Accuracy of it forms basis of whole insurance industry
complex task but there are 3 main approaches to accurately assess risk
Reduce impact
reduce likelihood
plan for recovery