Fundamentally, there is no new story to tell about the bewildering array of inter-related risks facing our world. What is new – and troubling – is that the linkages between them have reached unprecedented levels of intensity.

In April 2009, Guy Carpenter's Financial Intelligence Team published a briefing entitled Risk Profile, Appetite and Tolerance: Fundamental Concepts in Risk Management and Reinsurance Effectiveness. That briefing included definitions of Risk Profile, Appetite and Tolerance and how these concepts fit into an Enterprise Risk Management (ERM) framework. It also presented the results of their initial Risk Tolerance Benchmarking study, which summarized the information publicly disclosed in this area.

The CAS, CIA, and the SOA's Joint Risk Management Section Research Team and the SOA's Committee on Finance Research are pleased to make available a research report that examines the subprime mortgage crises and related financial consequences from the perspective of the insurance industry. The report was authored by a team led by Shaun Wang of Georgia State University.

The recent financial crisis demonstrated that sophisticated computer models are no substitute for sound judgment. As the life industry begins its recovery, companies and regulators alike are reconsidering the complex tools on which our business now depends and how to improve our collective skill at using them.

Swiss Re’s new Focus Report: “The Globalisation of Collective Redress: Consequences for the Insurance Industry” provides an update on the global spread of collective actions and assesses both the risks and the opportunities that this development carries for insurers.

The World Health Organization (WHO) has declared the H1N1 flu a pandemic.

This marks the first global flu epidemic in 41 years. In response to this development, members from the Society of Actuaries are advising businesses to revisit and/or create business continuity and preparedness plans.

Every life insurer is exposed to catastrophe risk. The largest carriers, of course, tend to have the capital on hand to absorb substantial losses and can rely on economies of scale to make reinsurance more affordable. Smaller life insurers, on the other hand, do not always have the same risk management tools available at a proportionate cost. Thus, they may feel forced to retain risks which, if realized, could imperil solvency. Fortunately, there are products on the market that make cover attainable for smaller life insurers.

Despite the financial crisis, the ILS market has more than held its own and appears poised for further growth. This Towers-Perrin article appears in the 2009/1 issue of Emphasis.

How do we picture probability? How can a patient deciding on a course of drugs be expected to translate “a 7% chance of dying” or “a 20% likelihood of negative side-effects” into a meaningful image?

The laundering of dirty money plays a key role in a large proportion of criminal activity which, according to international experts, generates around 1,500 billion dollars per year. To introduce these funds in the legal economy, the holders must provide them with an appearance of legitimacy, subjecting the dirty money to a whole series of transformations, with varying degrees of complexity, most often using mechanisms and techniques to facilitate the conclusion of the transactions, the circulation of clean money and the smooth running of the economy.

In the book “From Principle-based Risk Management to Solvency Requirements", SCOR specialists describe over five hundred pages how the company models risks according to the requirements of the Swiss Solvency Test (SST), which is based on concepts very similar to the ones set forth by Solvency II.

Beyond the regulatory requirements, the understanding of the concepts involved as well as the results of the comprehensive risk modelling process are essential in all sectors and are vital to the development of a coherent Enterprise Risk Management (ERM) process.

Insurers are increasingly using scenario analysis to evaluate multiple risks, but the industry could do more to fully exploit state-of-the-art approaches, according to Swiss Re’s new sigma study.

A U.K. life insurer improved its risk and financial management capabilities with the help of more sophisticated models based on a replicating portfolio of its liabilities.