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ERM for the UK actuarial profession

This call for research closed on 30 June 2010 and the content on this page is for information only

Background

ERM has many definitions.  The generally agreed concept is that ERM is wider than traditional risk management and covers all the risks within an enterprise (or company).  Traditional risk management focuses on identifying risks, measuring and monitoring risks and designing strategies to limit losses to agreed limits.  ERM recognises that businesses take risks in order to make a profit for their owners and therefore considers the upside of taking risks, and attempts to strike a balance between too much risk and not enough risk compared to the enterprise’s strategic direction. Risk is managed holistically in a fully integrated framework, across all different risk types and the different functions/companies within the organisation.

The call for research

The profession would welcome proposals in the following areas:

  1. How should firms define and use “risk appetite”, but with the emphasis on the need that outputs should be practically grounded and expressed. 
  2. How should firms identify and assess the hard to define risks – what techniques are available and how do they work in practice? This topic could possibly be linked with practical techniques for reporting on emerging risk and strategic risks, to mirror text from the recent Walker Report (see separate Appendix at the end of this paper).
  3. How should firms report and communicate tail dependencies and correlations to stakeholders including senior management, the Board and regulators. This includes mechanisms for reporting, and the need for effective communication. Note that the credit for diversification benefit can often be the largest single item in a firm’s assessment of its capital requirements, and hence it can be 'worth millions (if not billions)' to get this right.

The research proposed should concentrate on enterprises whose main business is the acceptance or transformation of risk, where the focus would not be limited to the negative aspects of exposure to risk but also the potential of managing risk successfully to enhance the enterprise’s potential. A preference will be shown to proposals that can be applied across traditional actuarial practice areas and more widely.

The successful proposal will be one where practical solutions are proposed to the questions set out above, including specimen output for a variety of notional case studies, and where the proposer can demonstrate how the research will benefit the users of actuarial services in the ERM arena. The Profession are encouraging proposals that concentrate on the development of future practice in this area that is innovative, but also practical and attainable, and which will make a significant contribution to the development of thought.  Whilst the limited use of surveys is not ruled out, we are not anticipating surveys of current practice and opinions but a focus on future thought leadership in ERM.

Contact Details

If you have any questions or wish to discuss any aspect of our funding for member-led research please contact the Research and Knowledge Team:

arc@actuaries.org.uk

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Events calendar

  • Spaces available

    Drawing from his most recent book “The New Long Life” and his longevity research Andrew J Scott will outline how longer lives and new technologies will fundamentally reshape how we structure our lives and transform the economy. As well as looking at the agenda this will set governments and corporates he will focus on the implications for you and how you prepare your future career.

  • India Town Hall

    Webinar
    28 January 2021

    Spaces available

    IFoA Immediate Past President John Taylor would like to invite you to the Institute and Faculty of Actuaries’ (IFoA) virtual India Town Hall 2021, hosted by John Taylor with IFoA Council Member Mahidhara Davangere and IFoA Chief Executive, Stephen Mann. 

  • Spaces available

    What are the options for the world economy looking ahead?

    In this Thought Leadership Lecture, Economist, Vicky Pryce, will be discussing world economic trends, including the differences in geographical performance and how output is recovering and where.

  • Spaces available

    Trust and Leadership for Actuaries

    Led by Dr. Jim Baxter, University of Leeds, this webinar introduces some key ideas in the ethics of trust, with a particular focus on those in, or on the path to, leadership roles. Dr Baxter is joined by a panel of experienced leaders who will give their personal perspectives on how they understand the value of trust and how they seek to promote and inspire trust, drawing on their experiences of leadership. The panel includes:

  • Health and Care Hot Topics webinar

    Online webinar
    10 February 2021

    Spaces available

    In this webinar, we have two presentations showing the latest research on the implications for life and health insurers of two key issues: genomics and pandemic risk.

    Dr Peter Joshi and Paul Timmers will share their research on how well-established underwriting processes can allow for genomics in predicting expected mortality and morbidity. They will then discuss the potential for stratified screening and personalised medicine to improve health and reduce claim costs.

  • Spaces available

    As the world’s attention begins to turn to COP26 later this year in Glasgow, Sarah Gordon (Chief Executive, Impact Investing Institute) will share her vision for how the financial services industry can deliver for people and the planet, as well as how to encourage more investment with the intention to generate positive, measurable social and environmental impact alongside a financial return.

  • Sub-Saharan Africa Town Hall

    26 February 2021

    Spaces available

    IFoA Immediate Past President John Taylor would like to invite you to the Institute and Faculty of Actuaries’ (IFoA) virtual SSA Town Hall 2021, hosted by John Taylor with IFoA Council Members Mukami Njeru, Prosper Matiashe and IFoA Chief Executive, Stephen Mann.

  • MENAP Town Hall

    2 March 2021

    Spaces available

    IFoA Immediate Past President John Taylor would like to invite you to the Institute and Faculty of Actuaries’ (IFoA) virtual MENAP Town Hall 2021, hosted by John Taylor and IFoA Chief Executive, Stephen Mann.