While more than 10 years have passed since the Sept. 15, 2008, collapse of Lehman Brothers and the last full-blown international banking crisis, the qualitative and quantitative risks affecting our industry and the way we work have never been greater. The pace of regulatory, technological, operational and environmental change is quicker than ever before. Innovation is moving forward and affecting us in ways we would not have imagined a few years ago. In this issue of The Actuary, the collection of feature articles explores how to identify and manage emerging risks—both those that are evident and those that are unseen—to prepare for the future.
A fundamental question around enterprise risk management (ERM) is how to achieve senior leadership support for a risk management program. In an article based on their Outstanding Session Award from the 2018 ERM Symposium, Sim Segal, FSA, CERA, and Philip Sherrill, CPA, CIA, CHIE, walk us through how to identify an ERM program that lacks this buy-in, what the typical causes are and what to do about it. Other challenges faced in the risk field include the considerations on how actuarial results are achieved, what they represent and how to utilize them. To address these concerns, Van Beach, FSA, MAAA, proposes the establishment of the chief modeling officer.
Looking toward the future, several articles in this issue contemplate impending risks and how to prepare for them. Kurt Wrobel, FSA, MAAA, focuses on the health insurance market. Fei Xie, FSA, FCIA, presents what happens when a new risk such as climate change emerges. She reflects on the devastation caused by the recent wildfires in California and how to manage climate risk. To round out our features in this issue, Rebecca B. Scotchie, FSA, MAAA, and Christopher H. Murphy, ASA, articulate how to set up an actuarial risk appetite.
To take us to the next level, we asked chief risk officers to share insights with us. In the online only article, “Risk is Opportunity,” Suzette L. Huovinen, FSA, CERA, CFA, MAAA, chief actuary and chief risk officer at Securian, states: “Risk management is a great way to get a broad perspective on an organization. You have to understand all aspects of the business to truly identify and manage the risks.”
While we recognize that this issue cannot capture every risk facing our industry, we wanted to include as many topics as possible for our readers. A few mini-articles outlining key emerging risks are also included covering the emergence and adoption (or nonadoption) of FinTech and InsurTech, the interdependence of risk and strategic risk management.
We hope you find this issue informative in sharing key topics from which we can learn and do what is needed to stay one step ahead of emerging changes and risks.
Copyright © 2019 by the Society of Actuaries, Schaumburg, Illinois.