Climate-related risk, including biodiversity, systemic risks, such as the ongoing effects of the Covid-19 pandemic, and the triple lock and related issues of an ageing population have all been identified as risk ‘hotspots’ by the Joint Forum on Actuarial Regulation (JFAR).
This body, which includes representatives from the Financial Conduct Authority, the Financial Reporting Council, the Institute and Faculty of Actuaries, the Prudential Regulation Authority and The Pensions Regulator, publishes its annual Risk Perspective report to highlight particular issues actuaries may need to focus on for the year ahead.
The Financial Reporting Council’s executive director of regulatory standards Mark Babington says: “Actuaries play a key role in assessing financial risks and providing expert advice on managing those risks. This year’s risk perspective has identified a range of key hotspots, from climate-related risk through to some of the longer-term impacts of the Covid-19 pandemic that actuaries should consider in the course of their work.
“Actuaries, employers and users of actuarial work are encouraged to closely consider these risks in order to promote high quality actuarial work and mitigate risks to the public interest.”
The full list of risks identified in this JFAR report are:
- climate-related risk (including biodiversity
- systemic risk (including the Covid-19 pandemic)
- ageing population and affordability
- unfair outcomes for individuals
- geopolitical, legislative, and regulatory risk
- technological change and competence in new areas (including machine learning, big data, artificial intelligence)
- impact of undue commercial pressure
- effective communication
