Description: This is a compilation or risk management terms garnered from a survey of risk professionals supplemented with analysis of firm-level information on significant risks as reported in 10-K financial statements. Results indicate the existence of significance differences in terminology. The dominating pattern observed is a dichotomy between internal and external perceptions. Also observed is a difference between terms used by actuarial professionals and traditional risk managers.

Description: A critical step in valuing a company for the purpose of financial reporting is the computation of the market value of economic surplus (MVES). This article provides a novel approach to the valuation of MVES that is stable and reasonably immune to “market noise.” Current approaches to the calculation of economic surplus of an insurance company generally define such surplus as the market value of the assets (MVA) supporting the liabilities less the market value of liabilities (MVL). While MVA is observable in the market, MVL is typically computed directly, without regard to the underlying supporting assets. Subtracting MVL from any value of assets that changes with market movements results in an unstable surplus. Consequently, a surplus that is not fully reflective of market sentiment has been rejected by many. This same approach is further used in the calculation of market consistent embedded value (MCEV) when a balance sheet approach is used .

Description: This Chairperson's Corner article discusses the SOA becoming the pre-eminent risk management profession. The Chairman's message is that actuaries have the inside track on risk management positions in the insurance industry and have a basis for competing for similar positions in the broader financial services industry.

Description: Risk Management and Actuaries—SOA Risk Management Task Force Update

Description: The author makes 10 predictions of how risk management will change over the next decade.

Description: The Federal funds rate increased by 4.25% in 2022 with further increases in 2023, which have already resulted in a liquidity crisis for a few banks. As the rapid increase of the interest rates pushed the new money rates above the yields of many life insurers’ investment portfolios, insurance companies are facing a dilemma between compressed margins from peer pressure and the concern with liquidity shortfalls and realized capital losses should mass surrenders happen. This paper discussed main emerging risks under rising interest rate environment, and several ways to mitigate these risks.

Description: The Federal funds rate increased by 4.25% in 2022 with further increases in 2023, which have already resulted in a liquidity crisis for a few banks. As the rapid increase of the interest rates pushed the new money rates above the yields of many life insurers’ investment portfolios, insurance companies are facing a dilemma between compressed margins from peer pressure and the concern with liquidity shortfalls and realized capital losses should mass surrenders happen. This paper discussed main emerging risks under rising interest rate environment, and several ways to mitigate these risks.

Description: The thrust of this article is that while ERM starts out as a compliance and corporate governance tool, well managed companies use ERM as a strategic tool that will help them increase shareholder value. To do so requires a synthesis of the actuarial techniques of insurance and the capital markets perspectives of corporate finance.

Description: This article argues that using Economic Capital as a metric does not capture all of the risks. The author suggests an alternative that better meets a corporation's overall risk management needs. This is value-based ERM, which is an approach that makes the quantification of enterprise value central to all aspects of the ERM process. It is a combination of two techniques—enterprise risk management and value-based management, and it captures all of the risks in a single metric.

Description: Summary of April 2020 Investment Section Town Hall and come additional commentary.