Description: To provide guidance to the actuarial leaderships globally and provide an evolutionary view of the educational requirements - learning objectives and/or content - for the profession in the field of Enterprise Risk Management.

Description: The roots of the crisis are understood on a simplified basis, by 3 Ls: a Lack of accountability b Leverage and c Liquidity. Historically, people requiring mortgages sought their mortgages from local institutions that would conduct the evaluation and hold the risk. Loan officers of these institutions were accountable for the outcomes of their decisions – defaults were a direct reflection on their judgment. Leverage was a second key factor. Institutions guaranteed mortgages against default. The third L, liquidity, because a problem. When property values eventually evidenced their inevitable fall, defaults occurred at historically high rates.

Description: This month’s global emerging risk is the fall in value of the U.S. dollar. The SOA’s 2010 Emerging Risks Survey found that 49 percent of corporate risk managers identify the fall in value of the U.S. dollar as the top emerging risk. This is a growing concern because of the brewing economic storms that could collide to have a big impact on the value of the U.S. dollar. From the Bubble Risk Bulletin – March 2011.

Description: This month’s global emerging risk is China’s inflation. The SOA’s 2010 Emerging Risks Survey found that 41 percent of corporate risk managers predicted a Chinese economic hard landing as the emerging risk that will have the greatest impact over the next few years and need to be considered for thoughtful preparation for potential global repercussions. From the Bubble Risk Bulletin, July /August 2011.

Description: This is the second part of a 2 part series on Real options analysis (ROA). This article looks into the limitations of using financial option theory when doing real options analysis with projects that are long-dated and uncertain, such as: 1. First-degree homogeneity, 2. Uncertainty must derive from Brownian motion, and 3. Risk neutrality.

Description: An update on the activities of the JRMS

Description: The article is authored by the chair of the Joint Risk Management Section and provides an update of recent changes relevant to members of the council, as well as interested non-members.

Description: There will be inflection points in the value of an instrument when interest rates change. These inflection points could materially impact the approximation of value change using ALM metrics. In this part of the seven-part series, I will highlight: • How to identify the inflection points; • the range of rate changes where ALM metrics may be relied upon i.e., the “validity” range, outside of which recalculation of the ALM metrics is required and the potential that one needs to rebalance the portfolio; • a technique to improve on the approximation of value change beyond the validity range; and • a technique to convert non-linear change on the yield curve to be used with duration and convexity.

Description: Chronicles the journey made by Allstate to enhance its process for managing risk and ultimately find ways to better exploit risk opportunities.