Introduction
As part of its action plan for 2016, the Enterprise Risk Management (ERM) Committee of the Society of Actuaries of Ireland was asked to assist in assessing the sources of risk to the profession / public interest arising from activities carried out by members of the profession. The request arose from a discussion on risks to the public interest between Dervla Tomlin, President of the Society, and Tom Donlon, Chair of the ERM Committee. The ERM Committee’s remit already included a priority action to help drive an enhanced reputation for the Society and build trust in actuarial services. It was decided that the ‘Risk’ group within the ERM Committee would drive the response to this request.
Sources of relevant information
The Society’s Risk Register, maintained by executive members and regularly reviewed by Council, was an excellent starting point as a key source of information. A temporary working group, with members from various committees, was also formed to provide in-depth discussion on risks and associated controls. A report was produced and presented to Council in early July. The majority of this report was based on the risk register and the discussions of the temporary working group.
An additional source of information for discussion amongst the working group was a paper produced by the Financial Reporting Council in the UK titled ‘Joint Forum on Actuarial Regulation: A risk perspective’. The stated purpose of the discussion paper was to improve analysis of risks to the public interest to guide future work, raise awareness of the risks to help mitigate them and inform stakeholders about what regulators are doing. The Institute and Faculty of Actuaries participated in this joint forum.
Working group discussions
The range of risks discussed by the working group was quite interesting and enlightening. I personally found the process of discussing and articulating these risks to be a very useful exercise in understanding steps being taken by the Society to control the level of risks to which members are exposed.
Key risks (unsurprisingly) included; competency levels amongst members, conduct of members and communication with the general public.
Key controls included:
- The regular consideration of risk by Council and the maintenance of a risk register;
- A pro-active approach to getting recently qualified members to join committees or otherwise contribute to the work of the Society;
- The education syllabus for trainee actuaries;
- CPD requirements and CPD provided for qualified actuaries;
- Actuarial Standards of practice and other guidance and regulation applying to actuaries and the work they carry out;
- The disciplinary scheme and Committee on Professional Conduct; and
- The oversight structure around public statements by the Society.
Report to Council
The working group ultimately presented a paper to Council summarising its discussions, findings and recommendations.
Findings and recommendations included:
- Continued focus on consideration of how the ‘wider fields’ in which many actuaries now operate fits in with current thinking;
- How to continue proactively engaging recently qualified members; and
- A number of specific thoughts relating to heightened risks to the profession arising from the low interest rate environment, increased regulation and stakeholder communication of the inherent volatility that actuaries seek to manage as part of our everyday working lives.
Next steps
Council thanked the ERM Committee and the working group for its assistance in generating a useful discussion and helping bring some additional depth of consideration to its understanding of risks faced by the Society and controls used to manage them.
The ERM Committee will continue to serve the purpose of driving greater understanding around risks faced by the Society through its active consideration of emerging risks and hot topics.
Billy Galavan is a CRO with Zurich Life Assurance and a member of the SAI's Enterprise Risk Management Committee.
The views of this article do not necessarily reflect the views of the Society of Actuaries in Ireland, the Enterprise Risk Management Committee, or the author’s employer. The article was edited by the Communications Subgroup of the Enterprise Risk Management Committee.