The Joint Forum on Actuarial Regulation (JFAR) has published its Risk Perspective: 2019-20 Update.
This year, a new “Systemic Risk” has been included within which the JFAR considers the potential impacts of the current pandemic on actuarial work.
Other risks include:
- Ageing Population and Affordability - The risk of failure to allow for changing costs of mortality, morbidity and family support systems due to future experience deviating from projections.
- Unfair outcomes for individuals - The risk of actuaries not acting in the best interests of customers which may result in unfair treatment of some subgroups in favour other subgroups that are financially more profitable.
- Geopolitical, Legislative and Regulatory Risk - The risk that actuaries are unable to consider, or plan, for the potential for political, legislative or regulatory change at an international or national level.
- Technological Change and Competence In New Areas - The risk that actuaries entering new fields may not have a deep enough understanding of the statistics or that they may not adequately understand Artificial Intelligence (AI) models or other disruptive advances.
- Impact Of Undue Commercial Pressure - The risk that actuaries may be placed under significant pressure to adopt inappropriate assumptions or models to achieve desired commercial outcomes.
- Effective Communication - The risk of actuaries failing to adequately explain the risks and potential adverse outcomes to decision-makers or to others impacted by the actuarial work.