Description: This presentation is a panel discussion, session number 42PD, from the 2002 Valuation Actuary Symposium, held September 19-20 in Lake Buena Vista, FL. The panelist starts by noting that the session is now ‘Risk Management in a GAAP Context,’ rather than ‘Asset/Liability Management in a GAAP Context,’ meaning management actions designed to address GAAP earnings volatility and GAAP income. To do this, you need to identify the sources of GAAP income volatility and near-term, not long-term, erosion of GAAP income. The speaker believes that stronger and stable GAAP earnings gives management the ability to implement their business strategies: ‘risk management in a GAAP context is all about creating competence in management,’ and if management can implement its business strategies, then it can create long-term value.

Description: Actuaries are trained to measure and manage risks, for example, mortality, morbidity, interest rate, and asset default risks. However, the range of risks to which companies are exposed is wider than is sometimes considered. This complex array of risks needs to be managed holistically in concert and not in isolation. The actuary is increasingly called upon to assist in this process and needs a broader perspective and more powerful toolkit. From the Record of the Society of Actuaries, Volume 26, No. 3: Chicago Annual Meeting, October 15-18, 2000, Session 54PD.