Risks to High Quality Actuarial Work

Actuarial
Governance, risk & compliance, Life insurance, Mutuals, Non-Life

22 June 2020

On 11 June, the Joint Forum on Actuarial Regulation (JFAR) issued an updated Risk Perspective identifying 8 ‘hotspots’. The report sets out the collective view of the regulators on risks to high quality actuarial work arising from current issues. It is intended to raise awareness of the risks and potential mitigations, seek views on the risks identified, and guide the JFAR’s future work.  

The report identified Climate Related Risk as the top ‘hotspot’, potentially the ‘defining risk of our times’. Actuarial risk associated with pandemics is a subset of the new “Systemic Risk” which is the second most significant risk.   

The report states the following re. the latter: 

The pandemic has both health and economic impact. In both of these aspects the challenge for the actuary is to: 

  • understand how the current year’s experience should be reflected in assumptions about the future 
  • explain clearly to users of actuarial work what they have assumed and why.  

The IFoA issued a Risk Alert in April on points for actuaries to consider in relation to COVID-19.  

https://www.frc.org.uk/news/june-2020/global-pandemics-and-climate-change-pose-risks-to  

https://www.actuaries.org.uk/system/files/field/document/RiskAlert_COVID19_April2020_1.pdf 

John Burgum, Consultant Actuary, comments: “High quality actuarial work plays an important part in mitigating risks to the public interest.  Actuaries have been heavily involved in considering the health and economic aspects of the current pandemic. OAC is proud to be recognised and accredited for its professional services under the Quality Assurance Scheme from the Institute and Faculty of Actuaries and we are committed to achieving the highest standards. Excellence is at the centre of everything we do.

John Burgum

For more information
John Burgum
Consultant Actuary

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