Operational risks entail
- a danger of loss,
- a threat to the continuity of operations, or
- a diminishing of trust in the company,
caused either by the company’s internal processes or by unanticipated external events.
Operational risks are related to processes and methods, information systems, possible malpractice, property damage and staff competence.
The company makes every effort to eliminate any defects in its supervision systems that would permit unintentional or intentional errors or misuse concerning such matters as insurance or claims handling, investments, reporting, payment transactions, register details, data processing, division of work, partners' operations, or documentation.
Operational risks are charted on a regular basis. The potential impacts and likelihood of identified risks are assessed on a risk-specific basis, and the risks are linked to strategic aims and processes. Identified risks are compiled into a risk chart in which risks are classified on the basis of an overall evaluation and in accordance with their potential to threaten Varma’s success and the goals approved by the Board of Directors. Overall consideration of the impacts of the risks and deciding on measures take place in accordance with Varma’s standard planning and decision-making system. A continuity plan is drawn up for functions that may involve substantial risks. The preparation of the plan is at the discretion of the line management.