Current Practices and Challenges in Implementing Operational Risk Management in the Nigerian Insurance Industry

Abstract

The concept of operational risk management has helped financial institutions around the world in creating value and enhancing organisational performance. The focus in Nigerian Insurance industry is towards the establishment of a risk-based regulatory framework and the implementation of operational risk management strategy. The objective of this study is to highlight the practice and challenges of operational risk management in the Nigerian Insurance industry. Questionnaire survey research of managers from insurance companies was utilised. Our findings confirm that insurance companies in Nigeria have adopted a formal practice of operational risk management to a certain degree. The study also identified areas of challenges for the insurance companies which if properly addressed can enhance organisational competitive advantage. The study is beneficial to regulatory bodies, insurance companies and academia with a view to stimulate further research