A new approach towards emerging risk for life assurance01 September 2010
Mr Cantle suggested that the current approaches only work for risks which are already predicted but are weak at capturing emerging risks early in their development.
The approach of Mr Cantle and his colleagues looks at how underlying risk factors are interacting and causing uncertainty about business delivery. Emerging risk is assessed by measuring the uncertainty in the observed performance of an organisation and the interactions of its drivers rather than using observations to justify a preconception about where risks might be emerging.
Mr Cantle said: "Risk arises through the complex interactions of multiple factors, so if you want to see something new coming early you have to be studying the development of those interactions and working out what they might lead to. This approach gives actuaries the tools to measure uncertainty in performance early and to make sense of how it is emerging and where it might be leading to."
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Notes to Editors:
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