[OR] [MLRE] [E1] [C1] Overview of OR Case Study

Chapter 1

Understanding Your Organisation – Malaysian Life Reinsurance

Introduction

Operational resilience begins with clarity — clarity about who the organisation is, how it creates value, whom it serves, and where it is vulnerable to disruption.

This first instalment of Building Organisational Resilience: An Operational Resilience Guide for Malaysian Life Reinsurance sets the foundation for a structured, regulator-aligned operational resilience journey.

Malaysian Life Reinsurance operates in a sector where long-term financial obligations, market volatility, actuarial assumptions, and regulatory oversight intersect.

As a licensed reinsurer supporting Malaysia’s insurance ecosystem, it is essential that it continue to deliver critical services during severe but plausible disruptions, not only for its own stability but also for the resilience of primary insurers and the broader financial system.

Consistent with the 2025 BNM Discussion Paper on Operational Resilience, this instalment focuses on understanding the organisation before attempting to“fix” it.

BNM clearly articulates that firms cannot design meaningful impact tolerances orrecovery capabilities unless they first understand their business model, critical services, dependencies, and operational constraints.

Understanding Malaysian Life Reinsurance as an Organisation

It requires a holistic view of how the firm operates across underwriting support, treaty administration, investment management, finance, risk management, and stakeholder engagement.

From an operational resilience perspective, Malaysian Life Reinsurance exhibits several defining characteristics.

• A contractual, long-duration liability profile, where service disruption may not be immediately visible but can have compounding downstream impacts.
• Strong reliance on specialised expertise such as actuarial analysis, treaty structuring, and investment oversight.
• Dependence on accurate, timely, and secure data across underwriting, claims bordereaux, finance, and solvency reporting.
• Close interaction with primary insurers, regulators, external asset managers, and service providers.

The 2025 BNM Discussion Paper emphasises that such organisations must understand how operational weaknesses can translate into prudential, market conduct, or systemic risks, particularly under stress scenarios such as market dislocation, cyber incidents, or third-party failures.

Malaysian Life Reinsurance’s Operating Environment

MalaysianLife Reinsurance operates within a highly regulated financial services environment, shaped by:

• Bank Negara Malaysia’s prudential standards and supervisory expectations
• Market volatility is affecting asset-liability management
• Increasing digitisation of data exchange with cedants and service providers
• Heightened third-party and outsourcing risks

BNM’s 2025 paper highlights that operational resilience must consider external environmental factors, including regulatory change, technology concentration, and cross-border dependencies.

For a reinsurer, disruptions in upstream insurers, investment markets, or outsourced service providers can rapidly cascade into its own operations.

Understanding this operating environment enables Malaysian Life Reinsurance to identify areas of limited control with high exposure, a key theme in BNM’s discussion of systemic interconnectedness.

Composition of an Operational Resilience Team

BNM explicitly notes that operational resilience is not the responsibility of a single function. For Malaysian Life Reinsurance, an effective operational resilience team is cross-functional by design, typically involving:

• Senior management to provide accountability and risk ownership
• Risk management to align resilience with enterprise risk appetite
• Actuarial and finance functions to assess financial and solvency impacts
• IT and information security to address technology resilience
• Operations and treaty administration teams to map service delivery
• Compliance to ensure regulatory alignment

The discussion paper emphasises that boards and senior management must demonstrate oversight, not merely delegate.

This instalment, therefore, positions the operational resilience team as both a design authority and a coordination mechanism across silos.

Identifying Critical Business Services

A cornerstone of BNM’s 2025 framework is the identification of Critical Business Services (CBS)— services whose disruption would materially harm policyholders, market confidence, or financial stability.

For Malaysian Life Reinsurance, examples of such services may include:

• Treaty administration and premium settlement
• Claims support and reinsurance recoveries
• Investment and asset-liability management
• Regulatory and solvency reporting

Importantly, BNM cautions against defining criticality solely in terms of internal importance. Instead, firms must assess the impact on external stakeholders, including cedants and the financial system.

This instalment presents CBS identification as a strategic exercise rather than an operational checklist.

Key Characteristics Relevant to Operational Resilience

Several organisational characteristics shape how Malaysian Life Reinsurance approaches resilience:

• Low-frequency, high-impact events dominate the risk landscape
• Operational disruptions may manifest as delayed financial or regulatory consequences, rather than immediate service outages
• Heavy reliance on specialised people and third parties
• Strong expectation of data integrity, confidentiality, and availability

BNM’spaper recognises that resilience strategies must be proportionate and tailored. For a reinsurer, this means prioritising accuracy, recoverability, and decision-making continuity, rather than purely transactional uptime.

Establishing Organisational Goals for Operational Resilience

This instalment concludes by translating understanding into intent. Organisationalgoals for operational resilience at Malaysian Life Reinsurance are framedaround:

• Ensuring continuity of critical services under severe but plausible disruptions
• Protecting policyholders, cedants, and market confidence
• Maintaining compliance with BNM’s supervisory expectations
• Strengthening decision-making and recovery capabilities during stress

The 2025 BNM Discussion Paper underscores that operational resilience is outcome-focused rather than process-driven.

Goals must therefore align with impact tolerances, stakeholder harm prevention, and systemic stability, rather than compliance alone.

“UnderstandingYour Organisation” is not a preparatory formality — it is the anchor for all subsequent operational resilience activities.

For Malaysian Life Reinsurance, this instalment establishes the context, scope, and governance required to proceed confidently with implementation.

The next eBook [2], Implementing Operational Resilience for Malaysian Life Reinsurance, builds directly on this foundation by translating understanding into impact tolerances, dependency mapping, and scenario testing, fully aligned with BNM’s evolving supervisory expectations.

For organisations looking to accelerate their journey, BCM Institute’s training and certification programs, including the OR-5000 Operational Resilience Expert Implementer course, provide in-depth insights and practical toolkits for effectively embedding this model.