Description: "This video discusses the importance of identifying model risk in actuarial work. It explains the potential adverse outcomes due to inaccuracies or errors in models and emphasizes the need for actuaries to regularly review and manage these risks. It provides a step-by-step guide on how to identify model risk, making it a valuable resource for actuaries at all career stages.

Description: Find out how actuaries can use the principles of microservices, which are fundamentally important for improving outcomes for actuarial modernization initiatives. This presentation is NOT worried about Mmcroservices technology itself, but, microservices have properties that actuaries can mimic and replicate to make business processes be more efficient, more timely, and easier to maintain and govern. Focus on how you can incorporate software engineering concepts into help solving actuarial problems without concerning yourself with software engineering technology.

Description: Our panel will discuss techniques for efficiently modeling assets and liabilities while minimizing the computational expense of full-blown nested Monte Carlo simulation. These techniques include: • Neural networks • Data clustering and selection of representative contracts • Scenario reduction • Proxy functions for estimating the value of complex assets and exotic derivatives embedded in liabilities. Attendees will learn about the theory behind these techniques and implementation practicalities, and we will present case studies illustrating their benefits.

Description: Actuaries can leverage cluster modeling to reduce model runtime and cloud compute costs, which can be a real concern as companies transition from an on-premise grid to a scalable cloud solution. We consider practical considerations associated with clustering, through both US statutory and US GAAP lenses. Lastly, the results from a variable annuity liability clustering case study are presented.

Description: Discount rate curve construction has been a topic of renewed interest following recent changes in financial reporting standards. Interpolation is a key component of curve construction and can be conducted via an assortment of methods. This article explores six popular interpolation techniques and assesses how they perform with regards to desirable features of such methods: continuity of forwards, stability and locality, simplicity, and market consistency.

Description: Life and annuity markets around the world have seen increasingly complex investment-combined products, including universal life, fixed indexed annuities, variable annuities with a wide variety of guaranteed benefits, indexed variable annuities, etc. Insurance companies are facing unprecedented exposure to financial risks in addition to traditional mortality and longevity risks. The risk assessment and modeling for such complex designs by conventional methods often focus heavily on their market competitiveness and profitability. However, there seems to be a lack of quantifiable and systematic approach to assess investment risks associated with investment combined products. The objective of the proposed work is to develop a framework for quantifying and analyzing various forms of contractual designs and showcase different techniques to assess the trade-off between competitive contractual designs and their practical implications with regard to the difficulty of risk management.

Description: The NAIC continues to move ahead with the GOES (generator of economic scenarios) project for the transition to a new real-world economic scenario generator (ESG) prescribed for principle-based reserve and capital calculations. This session will provide a detailed project update from the regulator and practitioner perspective. An overview of model details and methods that have been decided, what remains to be determined, and the projected timeline for implementation will be discussed. Recent developments such as the industry field test and NAIC model office testing to assess the potential impact on reserves and capital will be discussed as will a review of the implementation of the stochastic exclusion ratio test (SERT). We will also discuss the components of the ESG model and the associated scenario sets the NAIC has exposed with respect to target and acceptance criteria. At the conclusion of this session, attendees will understand the current status of the NAIC GOES project and its projected timeline and will be able to describe the components of the model and how the model has been calibrated and validated. Attendees will also appreciate the remaining challenges in bringing the model to full implementation.

Description: This is the first of a two-part article introducing and elaborating an “Adaptor” strategy for ERM. Such a strategy is intended to fulfil two purposes: first, switching among four styles of risk-coping strategies in order to track qualitative changes in a business’s risk environment; and, second, to support the business in navigating with resilience through all the seasons of a business-economic cycle, i.e., of boom, bust, moderate, uncertain. This latter requires careful study of the nature of resilience, the familiar idea of bounce back, and the less familiar idea of bounce forward. Part I of our article is underpinned therefore by a supplementary document (available from https://riskviews.wordpress.com/adaptor-exceptionalism/), which addresses the issue of structural change in a business or economy. It draws heavily on ideas taken from the discipline of control engineering, as well as some from ecology, social anthropology, and economics. The entire two-part article is thus an exercise in cross-disciplinary Systems Thinking.

Description: A brief discussion on the importance of governance and documentation being in place. The article provides some resources to assist in the development, and the reasons behind having it in place.

Description: A preview of the details and content of the new Certificate in Climate Risk to be offered by the SOA beginning in early 2023.