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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

    Climate-Related Risk - This free to view webinar on Climate-Related Risk is the first in a series focusing on some of the ‘Hotspots’ identified in the JFAR Risk Perspective bringing the Risk Perspective to life with practical illustrations and insights from subject experts from the IFoA and other Regulators

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    Recent decades have seen institutions, such as employers and financial services, give people more choice and flexibility, but these freedoms have come with more responsibilities. Individuals are now responsible for managing more of their own financial risks, from ensuring they put enough money into their pension to securing affordable protection to be financially resilient.

  • Actuarial Innovation in the COVID-19 era

    This event is online. 
    26 April 2021 - 7 May 2021
    Spaces available

    Join us for this brand new IFoA webinar weries comprising of a fortnight of webinars, panel sessions and a hackathon, that showcase the range of ways in which the actuarial profession has added value, in the public interest, to the understanding and management of the current and future pandemics through insight and learning.

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    This event is also repeated on Tuesday 27 April, 09.00-10.30. Please click here to register your place if Tuesday is your preferred choice.

    Actuaries have a lot to offer biodiversity management over the next decade as the world develops more depth to its response to this global challenge. This sessional offers an opportunity to learn about this emergent risk, to contribute to our thinking as a profession and help us develop the next steps forward.

  • Europe Town Hall

    28 April 2021

    Spaces available

    IFoA Immediate Past President John Taylor would like to invite you to the Institute and Faculty of Actuaries’ (IFoA) virtual Europe Town Hall, hosted by John Taylor with IFoA Council Members Alan Rae, Jennifer Hartley, Maribel Vasquez Flores and IFoA Chief Executive, Stephen Mann.

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    Sessional Meeting - Free to viewMis-estimation risk is a key element of demographic risk, and past work has focused on mis-estimation risk on a run-off basis.  However, this does not meet the requirements of regulatory regimes like Solvency II, which demands that capital requirements are set through the prism of a finite horizon like one year.  This paper presents a value-at-risk approach to mis-estimation risk suitable for Solvency II work

  • Finance & Investment Virtual Conference 2021

    Available to watch globally in May.
    10-12 May 2021
    Spaces available

    This year's Finance and Investment Virtual Conference takes on the timely theme of ‘resilience’, something we have all learnt a lot more about in the last year! Our diverse range of talks will explore the theme of resilience in a variety of ways including in building robust investment portfolios, in the incorporation of ESG factors, in govern

  • Spaces available

    This talk will explore the potential benefits that wearable tech can bring to health & protection insurers and their customers. The traditional approach of integrating wearables into insurance has largely focused on measuring steps and using rewards-based incentive programs to encourage more activity.

  • Spaces available

    Join us for this talk with Professor Sir Adrian Smith as part of the 'Dr Patrick Poon Presidential Speaker Series'. Professor Smith joined The Alan Turing Institute as Institute Director and Chief Executive in September 2018. In November 2020, he became President of the Royal Society, in addition to his leadership of the Turing. He is also a member of the government's AI Council, which helps boost AI growth in the UK and promote its adoption and ethical use in businesses and organisations across the country. He received a knighthood in the 2011 New Year Honours list.

     

  • CILA 2021

    Available to watch globally in May.
    19-21 May 2021
    Spaces available

    We continue to live in a world of global uncertainty. Survival depends on our ability to simultaneously navigate through the diverse root-causes, ranging from: the consequences of Climate Change; on-going financial consequences of the COVID pandemic; or self-imposed changes in regulatory requirements and accounting standards.

  • Pensions Conference 2021

    Online webinar series
    16-22 June 2021
    Spaces available

    Welcome to the programme for our 2nd Virtual Pensions Conference. This year's conference features 11 webinars offering members and non-members the opportunity to get up to date content from leading experts in the pension industry. There will also be opportunity to ask questions and contribute to the discussion.