OPERATIONAL RISK MANAGEMENT IN NIGERIAN INSURANCE INDUSTRY – AN ASSESSMENT

ADESOLA HASSANA OKO-OSI

ADESOLA HASSANA OKO-OSI Department of Actuarial Science and Insurance, Faculty of Management Sciences, University of Lagos.

Keywords: Operational risk, operational risk management, insurance companies, developing countries

Abstract

The focus of the paper was to explore current practices of operational risk management in the Nigerian Insurance Industry. This is important due to the surprising burst of financial issues that have caused significant operational losses in recent times and the call by the regulatory body towards risk-based supervision. Sample population was the insurance companies in Nigeria. Stratified sampling was utilized in selecting the sample size. The author empirically examines this by use of descriptive statistics such as means and standard deviations. The results confirmed the fact that insurance companies in Nigeria have somewhat adopted a formal process of operational risk which serves as a basis for a detailed operational risk management framework. It provided a background on the awareness and the importance of operational risk management in the Nigerian insurance industry. The findings have major implications to the financial sectors and regulatory agencies in Nigeria.