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The Actuary The magazine of the Institute & Faculty of Actuaries

Risk and Investment Conference: Balancing risk and reward

Chairmen’s preview
Our 2009 conference, in Brighton, focused on the global financial crisis. Now our thoughts in 2010 turn to the future with the theme ‘Investing for success — balancing risk and reward’. What have we learned from the recent events about risk management? What new investment opportunities may arise from the resulting dislocated markets — can we manage the accompanying new risks?

We are delighted to have secured a high-quality and varied panel of external speakers from the financial press, academia, pensions, banking and asset management, including authors of some of the definitive books on the crisis.

Our opening speaker is John Kay, economist, Financial Times columnist, author of The long and the Short of It: finance and investment for normally intelligent people who are not in the industry and contributor to Verdict on the Crash: causes and policy implications, reviewed in The Actuary (January/February 2010). He will discuss different meanings and ways of thinking about ‘risk’, and explain how models are indispensable in finance and economics, but misused by people who make the mistake of thinking that economic models are true.

Following the introduction of the Actuaries’ Code, we will have one plenary session devoted to professionalism issues. Tony Hewitt from Imperial Business School will present case studies based on high-profile recent events, such as the collapse of Lehman Brothers. You will need to exercise your judgment as to how the Code should be applied in such difficult situations.

Sally Bridgeland will draw on her experience as the CEO of the BP Pension Fund Trustees to look at some of the key governance issues for pension funds, such as who is accountable for investment decisions and how should responsibilities and risks be measured and reported?

Our final session on the first day will focus on Lessons learned from the crisis for both regulation and risk management modelling, with contributions from Malcolm Kemp, Elliot Varnell and Bruno Solnik, a professor at HEC Paris and Hong Kong University.

The opening session on the second day will be led by Dr Riccardo Rebonato who, among his many talents, is the author of several books, including The plight of the fortune tellers and the forthcoming Coherent stress testing: a Bayesian approach. Riccardo will focus on stress-testing — why we need it and how it can be turned into a practical tool for managing risk to complement more statistical methods such as Value at Risk.

Our final plenary speaker is Colin McLean from SVM Asset Management, a renowned investor for over 30 years and a frequent and popular conference speaker and media commentator, as well as contributing author to the 2009 book Technical analysis and behavioural finance in fund management. Colin will discuss the practical impact of behavioural finance on investment management.

Breakout sessions
The conference programme also includes five breakout sessions, each of which offers the choice of three different workshops. We’ve aimed to provide a balance in each breakout between enterprise risk management and investment topics, and more technical versus more practical sessions, so everyone will find at least one choice that fits their needs.

The Risk and Investment conference is well known as a source of cutting-edge actuarial research and 2010 will be no exception, with six different working parties presenting the latest thinking on a range of investment and ERM topics, for example ERM for strategic and emerging risks. We have also added speakers from leading universities to share their recent academic research on topics such as challenging the accepted wisdom that active fund managers cannot generate alpha.

In response to your feedback, this year we have more sessions from practitioners on how these techniques are being applied in actuaries’ daily roles in risk and investment in the fields of insurance, pensions, fund management and banking.

Our conference will conclude with the popular hot topics session and, as always, you will have plenty of opportunities to socialise with your peers in the risk and investment area. We would like to thank the organising committee for their hard work in putting together a stimulating programme, and we look forward to seeing you in June.

Click here to visit the conference microsite.

Paul Fulcher and Andrew Hitchcox, chairmen, Risk and Investment Conference 2010 Organising Committee