Description: This article is part of a 2 part series on real options analysis (ROA). Before you can understand the limitations of ROA, you must first understand the difference between risk and uncertainty. This article goes into detail explaining the vast differences between the two phenomena.

Description: The mismatch between how interest rate impacts the value of assets and liabilities could have material negative impact to companies’ earnings and surplus. To quantify and mitigate the impact of such mismatches, companies have used matching a combination of duration and convexity. I will review these measurement techniques and their limitations.

Description: The article provides an update on the 2019 ERM Symposium with regard to date, location and content (General Sessions and Concurrent Sessions).

Description: Strategic Risk Management was given lower priority in a recent survey of ERM Objectives. This article tells how the author believes that recent events have caused many to shift to a more short term focus and in the future there will be a shift back to a priority for the longer term view that stands behind Strategic Risk Management when the environment settles down and things again seem to be more predictable.

Description: Discussion of how non actuaries are taking on many of the enterprise risk management roles of insurance companies. Discusses changes actuaries need to make to re-assert their roles. Also discusses roles actuaries can play in enterprise risk management outside of the insurance and pension industries

Description: Description of the mathematics involved when looking at low probability events within a company from the perspective of the C-Suite. The accumulation of small probability events leads to a much higher probability of at least one of them happening in a given period.

Description: Institutional investors seeking to hedge have no shortage of choices, and need the right framework to manage the different risks in portfolios as they arise. This article analyzes performance of different equity hedging strategies over the last 15 years, and lays out a potential hedging framework that takes into account types of risks being hedged, fundamental views, and current market pricing of protection.

Description: This is the second part of a 2 part series on Real options analysis (ROA). This article looks into the limitations of using financial option theory when doing real options analysis with projects that are long-dated and uncertain, such as: 1. First-degree homogeneity, 2. Uncertainty must derive from Brownian motion, and 3. Risk neutrality.

Description: The article provides a summary of the Drake Risk & Opportunity Forum held on October 21, 2022. The forum was a hybrid conference that attracted more than 200 attendees from 17 states, two countries, 48 employers, and five universities. Following an introduction by the Zimpleman College of Business Dean, the forum held six sessions. First was an insurance company CRO panel followed by a panel of non-insurance company CROs. Gary Zhu shared his outlook for interest rates and capital markets. The fourth panel discussed insurance capital models. The fifth panel discussed environmental, social, and governance (ESG) criteria when building insurance company investment portfolios. The final session of the day was a discussion about the NAIC, how they operate, and their priorities for the coming year.

Description: After a very challenging year, actuaries need to look back and consider the lessons learned. Have we returned to where we were, or have we moved on to a new norm? What does the COVID-19 pandemic market data tell us that will help us to prepare for future global crises?