Why involve actuaries?

However, the techniques have also been applied in wider fields, for example the initiative between the actuarial and civil engineering professions.

Another example of how actuarial techniques have been applied to non-traditional areas of risk management is identified in this case study produced by the IFoA's FRC and risk reporting working party

The history of actuaries in financial services

Actuarial science was initially developed to quantify mortality risks, using probability and statistics to understand the benefits of pooling of risks. With this initial work on mortality risks leading to the rise of life insurers with large funds to invest, actuaries then moved in to advising on these investment risks and the needs of life insurers to protect their solvency from fluctuations in market values. The mathematical expertise of actuaries enabled them to develop scientific techniques relevant initially for fixed interest investments, but now also for equities, property, derivatives and other classes. This has helped life insurers to survive the various financial crises of the last 80 years and the increasingly volatile conditions of recent years - An extract from a paper produced by the IFoA's FRC and risk reporting working party 2014.

The extent of actuaries' activities is perhaps best illustrated by the economic capital models now being used for risk management, capital management and regulatory reporting - An extract from a paper produced by the IFoA's FRC and risk reporting working party 2014. 

Ethics and standards

In becoming a member of the Institute and Faculty of Actuaries, members are making a personal commitment to high standards of education, competence and integrity. In return for this commitment, we offer attractive and relevant member benefits, such as professional education programmes and networking opportunities.

The Institute and Faculty of Actuaries issues Actuarial Profession Standards, which are ethical, and the Financial Reporting Council sets technical actuarial standards. All our members must follow the Actuaries' Code.

Education (including CPD and CERA)

Risk Management and Communication are both fundamental to the training of actuaries. Risk management concepts are embedded throughout the practice specific examination subjects and educational material, including an examination specifically in Actuarial Risk Management (CA1). Furthermore, a dedicated examination (ST9) is available for actuaries wanting to specialise in enterprise risk and, in addition to the fellowship, the globally recognized Chartered Enterprise Risk Actuary (CERA) qualification. Actuaries also benefit from Continuing Professional Development and an active programme of member-led research, and many of these events and publications are sponsored by a flourishing Enterprise Risk Management community.

How actuaries can help you

What you need to know; those areas of the Guidance where actuaries have the most to offer:-

• Rationale is that, for core control and effectiveness competencies, most UK listed companies will/should have strong frameworks 
• What is "new" in this guidance is the requirement for "robust risk assessments" which imply probabilities, stress tests, modelling etc.

(This is an extract from a paper produced by the IFoA's FRC and Risk Reporting working party, which will be available in November).

Many companies will already comply with the requirements, and actuaries are able to help directors report on the processes already in place in a language consistent with the new guidance - Extract from a paper produced by the IFoA's FRC and Risk Reporting working party.