JFAR Risk Perspective
The JFAR sets out its collective view on current risks to high quality actuarial work in its Risk Perspective. The Risk Perspective is intended to raise awareness of the risks to, and the importance of, high quality actuarial work in mitigating the risks to the public interest.
In the Risk Perspective: 2017 Update
the JFAR identified nine ‘hotspots’ where there is a perceived increase in risk to the public interest where actuarial work is central. For each hotspot, the risk is described in generic terms and the key risk drivers and current influences that lead to its definition as a hotspot are identified.
In its Risk Perspective: 2018 Update
, and in the following webpages, the JFAR shares the key developments during 2018 in relation to each of the hotspots, summarises the 2017 discussion and implications for actuaries and provides links to further reading.
To prepare the 2018 Update, the JFAR reviewed relevant literature (e.g. the World Economic Forum’s Global Risk Report 2018 and papers from the CRO Forum Emerging Risks Initiative), assessed the macro environmental conditions and considered the projects (completed and planned) within each of the JFAR regulators. In particular, the JFAR considered whether the current risk environment should lead to new hotspots being included in, or existing ones removed from, the Risk Perspective: 2018 Update. The research confirmed the continuing relevance of the nine hotspots. The JFAR has published its Risk Perspective since 2014. Previous versions can be found on the JFAR Publications page
. However, where necessary, the hotspot descriptions and current influences have been updated to more accurately reflect the 2018 conditions.
It should be noted that the JFAR is not necessarily saying there is current evidence of the risks materialising or of poor quality or insufficient actuarial work. It does not intend to propose additional regulation to mitigate all the identified risks. Any co-ordinated action will be proportionate and selected from a wide ‘toolkit’.
Actuarial Risk Identification Architecture (ARIA)
The JFAR uses an innovative approach to identifying risks to actuarial work, the Actuarial Risk Identification Architecture (ARIA). The ARIA enables the JFAR to identify and review the macro environmental drivers, risks inherent in actuarial work and the market characteristics which currently lead to an increase in risk. It is designed to identify hotspots and interactions between them in a holistic and dynamic fashion.
The JFAR invites feedback from practitioners and users by email RiskPerspective@frc.org.uk