As long-term risk managers such developments are of crucial interest to actuaries. The Resource and Environment practice area works to identify the implications for actuaries and their clients and help in the development of appropriate responses.
Foremost amongst these is climate change, an existential threat which has implications for existing practice areas such as:
- pension actuaries in terms of the potential impact on investment values, investment returns, funding strategies, mortality and demographics, and sponsor covenants
- general insurance actuaries in regard to climate-related property claims, business continuity risks, liabilities to third parties and for insurers of directors and trustees
- life and health actuaries in regard to investment values and trends in mortality and morbidity
- finance and investment actuaries in terms of the impact on investment risks, returns and hence strategy, and the development of innovative investment vehicles to assist in climate change adaptation and mitigation
- risk management in developing methodologies to recognise the impact climate change could have on insurance products, markets, reserving and regulation.
The Resource and Environment practice area works closely with all other practice areas in responding to these issues.
Other environmental changes which impact actuarial work include:
- resource limitations, and the need to live sustainably in a finite world, which have implications for economic growth, investment returns and liability reserving across all practice areas
- the implications of the emergence of broader societal objectives that recognise the importance of health, education, leisure, poverty reduction and the natural environment, and the limitations of a GDP growth target.
In addition to considering the impact of environmental change on existing work, the Resource and Environment practice fosters the development of actuarial involvement in new areas of environmental work, for example:
- advising the government and energy generators on long term energy projections
- advising the nuclear industry on funding for long term decommissioning and waste disposal
- wider risks to business due to environmental change and regulation
- the potential insurance costs for carbon capture and storage
- valuing fossil fuel reserves
- assisting organisations dealing with disaster relief.
This is a key part of the work of the practice.
The Resource and Environment Board is a senior, member-led committee of volunteer actuaries drawn from a variety of existing practice areas. It advises the IFoA on resource and environmental issues and is a source of expertise within the profession on such matters. It supports and promotes the interests of members in accordance with the profession’s strategic objectives. The Board has oversight of the Resource and Environment Research Committee & CPD Committee.
Many environmental issues have a global impact and the Resource and Environment Board is keen to work with IFoA members across the world. It also supports the work of the International Actuarial Association Resource and Environment Working Group.
The Resource and Environment Board builds on the work conducted by the former Resource and Environment Member Interest Group (MIG). The research and activities that were undertaken by the MIG are now conducted by the Resource and Environment Board. In 2017 it was decided to create a new Resource and Environment Member Interest Group (MIG) in order to build and share resource and environment knowledge among IFoA members to expand the profession’s capacity in this area. If you are interest in joining the MIG, please visit the web page.
Listen to Louise Pryor, Chair of the Resource and Environment Board, talking about how actuaries are forging into new fields, including climate change, and some of the exciting issues they are getting involved in – and making an impact!
- IFoA members should log in and view the recording through the IFoA's virtual learning environment, which will enable CPD to be verified.
- Non-members can view the recording below:
For more information about current Resource and Environment working parties, or if you would like to discuss setting up a new a working party, please email Sharon Cumberbatch, Resource and Environment Communities Manager.
- 18 June 2018
- 11 August 2017
- 19 September 2016
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For more information about Resource and Environment working parties contact the Communities Team