Description: When companies engage in risk management activities, they can be seen as modifying their distributions of future outcomes. Often, this takes the form of trading off a sure cost for a decrease in some potential risk of loss. Companies may carry out these activities with several goals in mind, such as reduction in earnings volatility or preservation of capital. This paper will demonstrate a method for evaluating possible strategies by dividing the effects on costs and risks into three tranches: earnings, impact and estate. The tranches can be associated with different interests of the various stakeholders. This trifurcation analysis can help to explain the risk-reward trade-offs of different risk treatment alternatives and can aid in risk-related decisionmaking.

Description: Article is a detailed discussion of the Risk Management and Own Risk and Solvency Assessment (RMORSA) Model Act that was recently approved by the NAIC and is being adopted by legislatures across the country.

Description: This is the strong message to encourage all actuaries in the world, who are struggling against low/zero/negative interest rate. Japanese actuaries have been struggling with low/zero/negative interest rate since 1995. There are experiences in asset management, product revision, pricing strategy, and capital management that can be applicable to other countries.

Description: In this article, the author examines how a seemingly impossible event becomes a harsh or startling reality.

Description: Read the French language version of the March 2017 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: Other articles that will be of interest to readers.

Description: Hear from the editor’s on the March 2018 issue of Risk Management published by the JRMS.

Description: The Risk Management Task Force polled the Risks & Rewards readers and asked the following questions related to Monte Carlo models: 1 How many scenarios do you run? 2 How did you determine the number? and 3 What confidence interval does your result have? The results are summarized in this article.

Description: Statistics were invented to describe heterogeneity and are now applied to tackle alea. It may not be appropriate. Let's clarify their field of relevance.

Description: This paper is Part 1 of a two-part submission. Part 2, “An Alternative Approach to Capital Allocation,” discusses using risk-replicating techniques that directly calculate the cost of capital. Such techniques can be used as a substitute for capital allocation. This paper expands upon current capital analysis by introducing a practical approach that considers the objectives of all stakeholders of an insurance company in setting appropriate capital targets.