Realizing the Opportunity for the Insurance Industry in Operational Risk Mitigation: An Interview with Sandra E. Giuffre

Taylor, Charles, The RMA Journal

Sandra Giuffre's principal interest is operational risk financing for financial institutions, where she is highly regarded for her ability to identify issues, create appropriate analytics, and develop solutions. Sandra began her career in securities and moved to the insurance industry in the mid-1980s. In 2002, she co-chaired an operational risk initiative for the ITWG. She was previously a managing director, and the FINPRO Global Operational Risk Practice Leader, Marsh, Inc. Combining her modeling and risk-transfer capabilities, she began to develop and evaluate methodologies for making the "operational risk--risk transfer" relationship explicit. In 2004, Sandra presented a program on operational risk and insurance at an internal Federal Reserve conference. Founding Giuffre Associates in 2005, she is now focusing on improving the ability to properly value insurance as a mitigant for risk and creating effective and efficient risk-transfer solutions, including new capital market insurance-based products. Charles Taylor recently had a conversation with Sandra Giuffre of Giuffre Associates about the potential value of insurance as an effective operational risk mitigant.

Taylor: Sandra, the insurance industry continues to miss an extraordinary opportunity to provide banks with operational risk insurance. They continue to sell traditional insurance policies that offer incomplete, overlapping, and uncertain coverage. What are your thoughts?

Giuffre: Insurers need to borrow a leaf out of the derivatives markets' book and create effective and efficient products that banks can rely on. These products must be tailored to fit with the way that banks segregate and manage their risks. Banks can help insurance companies provide the right type of policies by sharing their perspective and language, and then helping them develop the right requirements for these policies.

Taylor: What is the payoff for the banks? …

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Publication information: Article title: Realizing the Opportunity for the Insurance Industry in Operational Risk Mitigation: An Interview with Sandra E. Giuffre. Contributors: Taylor, Charles - Author. Magazine title: The RMA Journal. Publication date: December 15, 2006. Page number: 40+. © 2007 The Risk Management Association. COPYRIGHT 2006 Gale Group.

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