Advances in technology have enabled insurers to operate in a dynamic digital world. However, a reliance on technology, cloud-based platforms, outsourcing, and remote working increases a firm’s vulnerability to operational risks. This interconnected system allows risks to spread and increases exposure to single points of failure. This environment has caused a surge in the number of cyberattacks.
As a response, operational resilience has become a focal point for regulators in Europe. Multiple regulatory and industry bodies have recently released discussion and consultation papers on the topic. Operational resilience refers to the ability of firms to prevent, respond, recover and learn from operational disruptions.
In this paper, Milliman consultants discuss the regulatory landscape related to the issue. They also offer several steps firms can take to improve their operational resilience.