To IAA member organizations
The Insurance Regulation Committee of the
International Actuarial Association (the “IAA”) is pleased to inform you about
a new freely available online publication called the Risk Book. The Risk Book
provides a set of high quality reference materials for use in managing the
uncertainty of insurer risks. The IAA’s aim in developing these materials is to
help ensure both the sustainability of insurance programs and the protection of
policyholders. For
- An
actuarial professional organization, the Risk
Book may be an excellent source of educational material to meet its primary
education mandate as well as continuing professional development.
- A
regulator, the Risk Book may be an
excellent source of educational material to be used internally as well as
shared with the financial institutions it regulates.
- An
industry association, the Risk Book
may be an excellent source of educational material to be shared with its
members.
- An
insurer or other financial institution, the Risk
Book may be an excellent source of educational and reference material to be
shared with its senior management team as well as its Board of Directors and
Audit and Risk Committees.
- An
academic institution, the Risk Book
provides a convenient resource for teaching materials for instructors, or
learning aids for students.
The IAA welcomes the opportunity to
communicate with you further about the Risk
Book and its uses within your organization. While we are available for
potential opportunities to facilitate
presentations of Risk Book topics of
your choosing at seminars, webinars or other meeting venues, we also encourage
feedback on improvements to the current content and selection of topics.
The
IAA and the Risk Book
Historically, actuaries have played many
important roles for providers of insurance (e.g., pricing, product design,
valuation, and risk and capital management). In addition, actuaries have
provided a unique and central interface between supervisors and the providers
of insurance coverage to ensure both the sustainability of insurance programs
and the protection of policyholders. As a result, the actuarial profession has
contributed significantly to the development of risk management tools and
processes, both within and outside the insurance industry. Actuarial practice
continues to improve the understanding, measurement and communication of risk
and its implications through the development of tools (and increasingly
processes) to manage the uncertainty of risk in a sustainable and transparent
fashion. These tools and processes aim to trace, manage and mitigate the
acceptance and transmission of the uncertainty of risk, perhaps serving in a
similar aspirational capacity to the way that accounting
debits and credits trace the acceptance and
transmission of cash. This allows industry stakeholders, including actuaries,
supervisors and management, to clarify risk exposures, recognize their
sensitivities and provide sustainable, ongoing, management oversight.
The Risk
Book provides a description of the tools and processes available to
supervisors, insurers, and actuaries to estimate and effectively manage pooled
risks in a sustainable manner. The IAA hopes that these tools will be applied
beyond their historically successful micro-applications (focused on the
sustainability of individual insurance organizations) to also be of significant
value to the macro issues involving the intersection of insurance, banking, and
other financial services.
Scope
of the Risk Book
It is not the IAA’s intent to create a “one
and done” Risk Book, but rather to
build something like a dynamic Wikipedia summary of risk topics of current
interest. The IAA hopes that this will spawn additional research into these
topics, as well as relevant spin-off topics. Each chapter of the Risk Book covers the central issues of
its topic and includes references to additional information, where available.
The IAA intends to update and maintain the chapters and their
interrelationships on an ongoing basis on its website. The Risk Book is available to the worldwide actuarial profession and
all those concerned with the sustainable governance (via identification,
management and communication) of insurance operations.
Current chapters of the Risk Book include:
- Introduction to
IAA Risk Book
- Actuarial Function
- Professional
Standards
- Operational Risk
- Catastrophe Risk
- Non-proportional
Reinsurance
- Intra-Group
Reinsurance
- Addressing the
Consequences of Insurance Groups
- Distribution Risk
- ORSA
- Resolution of Insolvencies
- Capital – a Regulatory
Management Tool
- Asset Liability
Management
- Financial
Statements
- Governance of
Models
- Materiality and
Proportionality
- Risk and
Uncertainty
- Policyholder
Behaviour and Management Actions
- Dynamic
Hedging (due early
2018)
- Stress Testing
(due early 2018)
Biographical information about the authors
of the papers is included in each chapter of the risk book, including
experience from around the world in areas such as insurance supervision,
enterprise risk management catastrophe modeling, capital management, investment
management, reinsurance and financial reporting, The authors are: David Sandberg, Stuart Wason, Godfrey
Perrott, Peter Boller, Caroline Grégoire, Toshihiro Kawano, Karen Clark, Vijay
Manghnani, Hsiu-Mei Chang, Michael Eves, Alexander Fritsch, Eberhard Müller, Alan
Joynes, Ralph Blanchard, Sam Gutterman, Maryellen Coggins, Nick Dexter, Malcolm
Kemp, John Oost, Charles Gilbert, Tom Herget, Francis de Regnaucourt, Trevor
Howes, Sheldon Selby, David Sherwood and Jari Niittuinperä.
Each paper includes an email address ([email protected])
to allow readers to easily submit comments to the author, or to report problems
with the website.
The Insurance Regulation Committee is eager
to receive your feedback on current and possible new topics. Also, we are ready to facilitate speakers at
your meetings on these topics.
About
the IAA and the Insurance Regulation Committee
The IAA represents the international
actuarial profession. Our seventy Full Member actuarial associations represent
more than 95% of all actuaries practicing around the world. The IAA promotes
high standards of actuarial professionalism across the globe and serves as the
voice of the actuarial profession when dealing with other international bodies
on matters falling within or likely to have an impact upon the areas of
expertise of actuaries.
The objectives of the IAA’s Insurance
Regulation Committee are:
- to
promote the role of actuaries in the regulation and supervision of insurers so
that the public interest is served;
- to
support the creation of international principles and frameworks for regulation
and supervision of insurers in order to have actuarial principles realized
where appropriate; and
- to
maintain and to strengthen the relationships with key international organizations
dealing with the regulation and supervision of the insurance and reinsurance
industry.
Sincerely,
Members of the Risk Book Task Force
of the Insurance Regulation Committee