Operational risks
In our understanding, this category encompasses the risk of losses occurring because of the inadequacy or failure of internal processes or as a result of events triggered by employee-related, system-induced or external factors. The operational risk also extends to legal risks. Operational risks exist, inter alia, in relation to the risk of business interruptions or system failures or may derive from unlawful or unauthorised acts. Given the broad spectrum of operational risks, there is a wide range of different management and monitoring measures tailored to individual types of risk.
Core elements of risk management – for example with an eye to business interruptions and the failure of technical systems – are our contingency plans designed to ensure the continuity of mission-critical enterprise processes and systems (recovery plans, back-up computer centre). The flexible working model of alternating telecommuting adopted by Hannover Re is, among other things, also a risk-reducing measure inasmuch as alternative workplaces and the requisite infrastructure are kept available locally. At the same time, we are thus able to offer the possibility of a healthy work/family balance. An important element of our human resources management policy, teleworking also reduces the risk of potentially losing key personnel by facilitating an attractive working environment.
As far as possibly unlawful or unauthorised acts are concerned, we enable our staff and partners to report certain serious breaches of the law pertaining to Hannover Re anonymously through our electronic whistleblower system. The information provided is brought to the attention of Hannover Re's Compliance Office so that it can investigate potentially suspicious circumstances. All tips are handled in the strictest confidence.
Against the backdrop of the wave of illness caused by the A/H1N1 virus Hannover Re took a number of preventive steps to protect its staff. Among other things, they were kept constantly updated on the latest news. In addition, the crisis management team held regular meetings to consider at length the issue of an influenza pandemic.
The range of tools is rounded off with external and internal surveys of clients and staff, the line-independent monitoring of risk management by Internal Auditing and the internal control system.