Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
    • Moody's - Climate Risk Insurers series
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • The Actuary Issues
  • February 2015
02

Natasha Regan says that working together is the way to understand actuarial risks

Open-access content Tuesday 3rd February 2015 — updated 3.48pm, Monday 4th May 2020

Natasha Regan says that working together is the way to understand actuarial risks

Actuarial work is central to many financial decisions in insurance and pensions and is an important factor in other areas requiring the evaluation of risk and financial returns. High quality actuarial work promotes well-informed decision-making and mitigates risks to users and the public; poor quality actuarial work can result in decisions being made which are detrimental to the public interest

To understand and co-ordinate responses to risks to the public interest where actuarial work is relevant the Financial Reporting Council (FRC) has set up the Joint Forum on Actuarial Regulation (JFAR).

JFAR members are the Financial Reporting Council, the Institute and Faculty of Actuaries, the Financial Conduct Authority, the Pensions Regulator and the Prudential Regulation Authority. It is a unique collaboration between regulators to co-ordinate the identification of, and response to, public interest risks to which actuarial work is relevant.

In October 2014, a discussion paper, Joint Forum on Actuarial Regulation: A risk perspective, was published to gather views on the identification of risks. The paper sets out how the JFAR has identified risks, what they are, and its perspective on areas where actuarial work is relevant to the risk or to its mitigation. There may not necessarily be current evidence of these risks materialising or of poor quality actuarial work but the risks should be assessed and if necessary mitigated.

Actuaries, their clients and employers, other professionals and end-users have until 20 February 2015 to provide feedback to the paper which can be found here.


JFAR is chaired by Stephen Haddrill, CEO of the FRC, who said:

"Actuarial work is vital in promoting trust in financial markets among the millions of UK pensioners and savers and the many investors and investor groups who allocate capital. We want to build justifiable confidence in that work. This paper is very much a 'think-piece' - a vehicle for seeking wider input at this preliminary stage on the JFAR's analysis. In particular we are seeking:


• to improve our analysis of risks to the public interest to guide our future work;

• to raise awareness of the risks to help mitigate them; and

• to inform stakeholders about what regulators are doing.


Actuarial involvement is central to some of the risks (for example in modelling in insurance and pensions). In some areas actuarial work supports decisions that have the potential to create a risk to the public interest (for example in the design and distribution of insurance products). Some of the risks we consider are very broad (for example environmental concerns) and actuarial work is just one strand among many that have an impact on the public interest."

Approach to risk identification

JFAR has adopted a practical approach to identifying risks to the public interest which builds on analyses already performed by each of the regulators. Having identified risks to the public interest and considered the actuarial work component of each, JFAR then selected those which are potentially suitable for a co-ordinated analysis.


The FRC and the IFoA held meetings with a range of actuarial practitioners to gain further insight into risks and issues they and their clients face. 

The risks

The discussion paper describes a number of high-level risks to the public interest, outlines underlying drivers of those risks, and explains the potential impact of the risks and the relevance of actuarial work. Within each high-level risk, potential areas for co-ordinated analysis by the JFAR are listed. These 'hotspots' for co-ordination can relate to any current or evolving feature of a risk - including sources of risk, difficult aspects of actuarial work, and potential impacts on vulnerable groups.


Table 1 Collaborative action

By responding to the discussion paper, stakeholders can help determine how individual actuaries, the profession and regulators respond to the risks. 

Some risks might already be appropriately mitigated. Other risks might be addressed by raising awareness, providing education, issuing guidance, or monitoring. It is not assumed that there should be more standards or regulation; the collaborative effort of the JFAR will help to ward against any potential duplication.

A feedback statement will be published in the first half of 2015 that summarises the responses and explains how they have affected the risk perspective and the forward agenda for addressing public interest risks to which actuarial work is relevant.

Natasha Regan is project director at the Financial Reporting Council

This article appeared in our February 2015 issue of The Actuary .
Click here to view this issue

You may also be interested in...

2

Automatic assistance

Insurers continue to experience pressure to produce audit-quality financial statements to ever-tighter timescales, and Solvency II reporting will not be immune to this. Gabi Baumgartner and Tejas Nandurdikar share some advice to speed up the process
Thursday 29th January 2015
Open-access content
ta

Solvency II affected by EIOPA's budget cut

The European Insurance and Occupational Pensions Authority (EIOPA) has announced a cut to its budget which will affect the implementation of the Solvency II directive.
Wednesday 4th February 2015
Open-access content
2

A steep climb for FRC guidelines

Much like his own hill walking adventures, Colin Ledlie outlines how the Financial Reporting Council’s UK Corporate Governance Code guidance is driven by cutting-edge thinking in enterprise risk management
Friday 30th January 2015
Open-access content
2

Final countdown to Solvency II

In the remaining year before Solvency II comes into effect, Neil Cantle explains how to prepare for the Own Risk and Solvency Assessment part of the new regulatory regime
Thursday 29th January 2015
Open-access content
ta

Trustees will breathe a 'sigh of relief' at pension transfers guidance

Pension scheme trustees will breathe a sigh of relief thanks to new guidance on pension transfers, according to Barnett Waddingham.
Friday 13th February 2015
Open-access content
2

It's a GAS in the Gulf

With this year’s focus on the diversity of the actuarial profession in mind, Catherine Love Soper describes the launch of the Gulf Actuarial Society (GAS) in Dubai
Tuesday 3rd February 2015
Open-access content

Latest from Regulation Standards

tfd

A matter of adjustment

Private assets will continue to shine even under the Treasury’s proposed changes to the Solvency II matching adjustment, says Ziling Jiang
Wednesday 2nd November 2022
Open-access content
ykf

A home run: reducing inequality through impact investing?

Sophie van Oosterom, Wojciech Herchel and Mark Callender consider how ‘impact investing’ in social housing could help to reduce inequality
Wednesday 5th October 2022
Open-access content
hgv

Exchange of ideas: IFRS 17 implementation in the Caribbean

Servaas Houben considers how IFRS 17 principles could benefit insurers in the Caribbean – and what European insurers could learn from the region when it comes to implementing the standard
Wednesday 31st August 2022
Open-access content

Latest from Position

TPR publishes coronavirus guidance

The Pensions Regulator (TPR) has published guidance to help UK pension trustees, employers and administrators deal with the financial and regulatory risks posed by coronavirus.
Monday 23rd March 2020
Open-access content
2

Expert advice

This edition of the magazine focuses on data science and its applications, which will be a recurring theme for the IFoA.
Friday 28th February 2020
Open-access content
2

Tesla sparks fears of insurance market overhaul

That is according to a new report from Moody's, which highlights how Tesla has already started offering premiums that are up to 30% cheaper than those of mainstream insurers.
Friday 14th February 2020
Open-access content

Latest from February 2015

Next UK government urged to adopt five pension measures

The next government has been urged to adopt a five-point plan to combat current issues with pensions.
Friday 27th February 2015
Open-access content
2

Record 59% of UK employees have pensions

The proportion of employees with workplace pensions in 2014 was 59%, according to research.
Friday 27th February 2015
Open-access content
2

European hotel investment transactions increase to €14.4 billion

The value of European hotel investment transactions in 2014 was €14.4bn (£10.4bn) – an increase of 86% from 2013.
Thursday 26th February 2015
Open-access content

Latest from no_opening_image

TPR publishes coronavirus guidance

The Pensions Regulator (TPR) has published guidance to help UK pension trustees, employers and administrators deal with the financial and regulatory risks posed by coronavirus.
Monday 23rd March 2020
Open-access content
web_p24_cat-and-fish_iStock-483454069.png

Sensitivity analysis: swimming lessons

Silvana Pesenti, Alberto Bettini, Pietro Millossovich and Andreas Tsanakas present their alternative approach to sensitivity analysis
Wednesday 4th March 2020
Open-access content
ta

IFoA adjudication panel: Mr Jack Wicks, student

On 30 October 2019 the Adjudication Panel considered an allegation of misconduct against Mr Jack Wicks (the respondent).
Friday 28th February 2020
Open-access content

Latest from 02

2

Impacts of falling oil prices

With the price of oil down, Gail Tverberg asks how the commodity is likely to perform in the next few years and predicts the many likely effects on the energy market and the global economy
Thursday 29th January 2015
Open-access content
2

Interview: Andrew Duguid

Andrew Duguid talks to Gemma Gregson and Helen Lau about the near collapse of Lloyd’s, putting actuaries on the map and the importance of change and innovation
Thursday 29th January 2015
Open-access content
Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Senior Pricing Associate

Scotland / England, London
Up to £60000 per annum
Reference
149081

Outside IR35 - Reserving Contract - 6-8 months

London (Central)
Daily rate contract - outside IR35
Reference
149079

Actuarial Analyst - Longevity Reinsurance

England, London
Up to £55000 per annum
Reference
149080
See all jobs »
 
 
 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2023 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited. All rights reserved. Reproduction of any part is not allowed without written permission.

Redactive Media Group Ltd, 71-75 Shelton Street, London WC2H 9JQ