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The Actuary The magazine of the Institute & Faculty of Actuaries

Regulators publish top 2018 risks for actuaries

The Joint Forum on Actuarial Regulation (JFAR) has today published a report identifying nine potential ‘hotspots’ for increased risk to the public where actuarial work is central.

Top 2018 risks for actuaries published ©iStock
Top 2018 risks for actuaries published ©iStock

This is intended to focus actuaries on the most important risks so their work is of the highest quality, exploring the implications of people living longer, rising environmental concerns and unprecedented technological advancement.

The perspective report was developed using a new Actuarial Risk Identification Architecture (ARIA), identifying the macro environmental drivers and market characteristics that lead to increased risk.

“In this ever-changing world, actuaries make judgements to measure and manage risk and uncertainty, adapting their work to respond to these challenges,” JFAR chair, Stephen Haddrill, said.

“We believe that the Risk Perspective will support actuaries, their employers and users of actuarial work to consider current and emerging risks in their activities.”

The JFAR was established in 2013 and comprises the Financial Reporting Council, the Institute and Faculty of Actuaries, the Financial Conduct Authority, the Pensions Regulator and the Prudential Regulation Authority.

The nine hotspots for increased risk to the public include:

• Political and legislative risk
• Mortality
• Technological change
• Terrorism and cyber crime
• Climate-related risk
• Regulatory change
• Financial security
• Pension scheme management
• Market performance and uncertainty.

Common themes that cut across the hotspots, such as professionalism, intergenerational fairness and Brexit, are also recognised in the report, as well as the inherent risks in actuarial work.

The JFAR invites feedback by email to RiskPerspective@frc.org.uk and will hold stakeholder outreach events throughout 2018.

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