As long-term risk managers such developments are of crucial interest to actuaries. The Sustainability 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 Sustainability practice area works closely with all other practice areas in responding to these issues. It has created a number of Practical Guides for actuaries in the different investment practices which are available to download and included: An introduction to climate change for actuaries.
Other sustainability impacts on 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 Sustainability Board (the “Board”) fosters the development of actuarial involvement in new areas of environmental work as well as those that support the Sustainable Development Goals, 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 Board.
The Board is a senior, member-led committee of volunteer actuaries drawn from a variety of existing practice areas. It advises the IFoA on sustainability issues, including Climate-related risks 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 Sustainability Research Committee & CPD Committee which co-ordinates its research and CPD activities. Until July 2020, the Sustainability Board was known as the Resource and Environment Board.
Many environmental issues have a global impact and the Sustainability 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 Sustainability 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. The Board supports a number of working parties, the Sustainable Development Goals MIG and it the Practice Board sponsor of the IFoA’s Financial Systems Innovation Centre (FinSTIC).
The Board welcomes volunteers from all areas of the professional to support and engage in sustainability issues. Find out further details on these opportunities and how to get engaged.
- 18 June 2018
- 23 June 2020
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For more information about Sustainability working parties contact the Communities Team
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Cancer incidence and mortality vary by region and socioeconomic status. Modelling the structure development and trends of cancer risk is important for insurance purposes and can impact pricing and reserving in related health insurance fields such as critical illness insurance and care provision.
A panel discussion with investment representatives discussing the impact of investment on climate change and vice versa.
This event is part of The Road to Glasgow: IFoA’s Sustainability Thought Leadership Series which will provide a platform for prominent contributors so that our members and others can understand the perspectives of a wide range of parties interested in the climate debate.
Climate change is one of the greatest risks facing our world today. Addressing it will require multi-faceted solutions. Through this panel session, we will explore the different levers that can be used to meet net-zero targets including climate science and data, government engagement, and mobilising green finance.
How governments and societies collectively respond to the climate crisis is increasingly being analysed through the lens of intergenerational fairness. Our expert panel will assess and explore the extent to which inter-generous fairness is being considered in climate policies, the lessons from those countries who are leading the way on fairness and justice in climate interventions, and more.
This practical course is aimed at actuaries at any stage of their career who want to develop their own growth mindset and apply it to their work setting and personal or professional lifelong learning. The content of the course builds on the lecture given by Dr Helen Wright on Growth Mindset as part of the President’s 2021 Lecture series, and will be delivered over a period of 2 months, from mid-October to early December.
The climate crisis and the degradation of our planet will affect societies everywhere. How we address these threats will require solutions that transcend borders. As a global profession, the actuarial community is well-placed to consider and propose effective risk management solutions to help manage the climate crisis.
Content will be aimed at all actuaries looking to understand the issues surrounding mental health in insurance and in particular those looking to ensure products and processes widen access for, and are most useful to, those experiencing periods of poor mental health.