Actuaries and Enterprise Risk Management / Solvency II
Risk management is a modern field that is currently in a state of development and transition. But it is precisely the opportunities to design and shape this area in its development stage, coupled with the wide spectrum of tasks and areas of deployment, which makes risk management such a significant and attractive field for actuaries to work in.
Actuaries have a core role in risk management because they are involved in all the key steps of the insurance business: product development, pricing, asset-liability management, reserving, valuing economic capital and many more. Moreover, some of the main tasks and duties of risk management consist in anticipating future developments, making forecasts and being prepared for these developments. Precisely thanks to the nature of their education and training, actuaries possess the necessary skills to perform these duties.
Enterprise Risk Management (ERM)
ERM extends way beyond risk management in its classic sense. It is not only restricted to the threats that are associated with the risks facing a company; it also includes the earnings potential of taking on a risk. This makes it more comprehensive than the risk management function described in Solvency II. Alongside the usual quantification of risks, the qualitative elements of risk management, such as risk strategy, risk culture and appropriate organisational structures and processes in a company, are becoming more important.
By participating in an international initiative to educate and train actuaries in ERM the DAV has responded to the increasing demand for experts in the field of risk management. Upon completion of this internationally standardised supplementary qualification, actuaries acquire the title of Certified Enterprise Risk Actuary (CERA), thus demonstrating and documenting their specialist competence in ERM to the outside world. At the same time, this makes them ideally prepared to take on the new risk management tasks and duties that have arisen under Solvency II.
Actuarial Function under Solvency II
Solvency II introduced the concept of the Actuarial Function, which has to meet countless calculation and valuation requirements. Thanks to their professional qualifications and membership in a professional body such as the DAV, actuaries are particularly suited to perform this function. The risk management function, also included under Solvency II, provides a challenging area of deployment for actuaries with the appropriate education and qualifications.
DAV's Enterprise Risk Management Committee
The DAV's Enterprise Risk Management Committee is a body that, in an inter-disciplinary manner, looks at the qualitative and quantitative issues surrounding Enterprise Risk Management. The committee places particular emphasis on the Actuarial Function and the Risk Management Function.
Publications
Reports on Findings
The following list provides an overview over the reports on findings
published by DAV's Enterprise Risk Management Committee. For every
report there is an abstract in English and the full version in German
available.