Life in Indonesia: Second quarter 2022
Our review of life insurance industry developments in Indonesia from the second quarter of 2022.
In this paper we look at the common industry practices regarding operational risk modelling and explore the problems with frequency-severity models. We also look at an alternative approach in the form of causal modelling and how this can overcome some of the issues encountered with more traditional modelling techniques. We also discuss development areas in the field of operational risk modelling for consideration.