Description: In this article, the author examines five common perspectives on risk and see how they affect not just each participant’s own choices but everyone else’s choices, as well.

Description: The Joint Risk Management Section conducted its fourth survey of emerging risks in fall 2010 in light of the BP oil spill which brought the impact of various risk combinations to the fore.

Description: This is a book review of 'Mastering Operational Risk'. The book offers a high level review of the risk management process based on the banking industry. The target audience is someone interested in understanding their company's operational risk framework.

Description: This article is a recap of the 2010 ERM symposium and the paper awards.

Description: Read the September 2020 issue of Risk Management published by the Joint Risk Management section. Newsletters provide practical information for the working actuary, articles on trends that impact sections and news about section activities.

Description: Political figures and journalists have tended to blame deregulation and greed for the credit crisis. However, we would like to suggest that these were not the primary cause of the credit crisis. The real cause of the crisis was faulty regulation and arrogance. Flawed regulation in the over-reliance on complicated capital models and arrogance in believing that the complex mathematical formula in risk models overcame the limitations on input availability and enabled companies to capture returns that were greater than the cost of capital, have led Wall Street by creating CDOs and similar instruments to repackage risks and take out the systematic excess risk charges as profits, and have also allowed companies to run “prudently” on leverage ratios that were in hindsight over the limit.

Description: The problem facing risk distributors is that product pricing is sticky, whereas the market price of risk can be quite volatile. This disconnection can become particularly severe during market downturns. The problem facing risk insurers is maintaining market share in benign market conditions when the market price of risk is low. Strategies that are dynamic with respect to time are difficult in practice, since they require more capital in volatile markets.

Description: Could it be that the depth of our current crisis is related to our failure to find an economic goal other than continuous “growth” as it’s been measured for decades? As painful as it may be, we can view the current crisis as a wake-up call. Rather than trying desperately to restore a “healthy” economy, perhaps it’s time to try building a truly healthy economy – one where we don’t keep promoting consumption of any and all kinds at the expense of saving and investing for the future.

Description: In this article, a numerical comparison of two commonly used FIA valuation methodologies is conducted to help insurers decide on the best methodology to use under GAAP LDTI and VM-22. We compared two modeling approaches to project the future index credits with the annual point-to-point crediting formula: Tthe stochastic equity crediting model and the deterministic option budget crediting model. The analysis is then extended to different levels of option budgets and the monthly average crediting formula. The advantages and disadvantages of the two equity return projecting approaches are also highlighted and will be discussed later in the report.

Description: This article is dedicated to the non-statutory accounting treatment of common credit risk exposures of life insurers but does not cover all aspects of non-statutory accounting standards. It introduces the concept of and the valuation of credit risks, concerning life insurers.