Description: Many top-performing businesses aren’t just risk aware, but rather risk intelligent. Such a posture helps prepare companies for a major event and can demonstrate to a regulator or auditor that an appropriately strong control framework is in place. Better still, companies gain real strategic value from a “risk adjusted” understanding not only of their threats and vulnerabilities, but also the upside opportunities associated with various risks. It starts with having both qualitative and quantitative information to identify, assess and manage risks. Strategic risk management, at its core, is about creating value by increasing transparency and accountability, and quality of information. More than a mere compliance exercise, effective risk management enables more informed strategic decision making, increased accountability and transparency, a greater likelihood of organizational success, and – ultimately – competitive advantage, as borne out by many studies that correlate risk management and financial results.

Description: Part one of a two-part article, to be contined in Feb 2014. Provides useful rules of thumb for breaking out investment return into components of periodic arithmetic return, geometric return, the volatility of returns and the correlation of returns by asset class. Develops and relates these axiomatic concepts into rules of thumb for estimating quantiles of a range of stochastic returns.

Description: Summarizes the state of US government balance sheet and defends the view that inflation will not rise sharply in the next few years.

Description: Analysis of consequences of investment risk taking by public pension plans.

Description: New Zealand is about to launch its first variable annuity with guaranteed lifetime withdrawal benefits. The product design is mindful of the lessons from the financial crisis in the United States, Europe and Japan.

Description: Presentation discussing modeling of daily and hourly rainfall, both occurrence and amount. These distributions would be needed to price derivative or insurance contracts involving rainfall amounts.

Description: Under non-Aristotelian logic, there are multiple values, or shades of gray. Indeed, there may even be unexpected results from logical combinations, like “both” and “neither.” This article discusses how this insight should be applied to the current debate between formula-driven reserves with limited assumption flexibility and the reserve principles approach. For reserve standards, we do need both actuarial judgment grounded in reserving principles and restrictive formula methods or safe harbors.

Description: This article explains the issue causing from asset dependency discounting as required by IFRS 17, and proposed some possible methods to solve the issue.

Description: This article examines potential approaches to the calculation of the risk adjustment component, with a focus on a case study related to a UL product.

Description: Provides summary of qualitative factors in the current fiscal, economic and political environment that could lead to higher inflation.