The Institute supports effectively regulated capital markets, both public and private, in Australia and globally. In relation to private markets, our main concern is that some retail investors may not fully understand what they are purchasing. To support informed retail investor participation, more transparency of fees, risks and performance will help consumers compare the different investments across private and public market options.

Actuarial skillset is extremely suited to work in banking dealing with risk and uncertainty, complex products and application of quantitative models. In this session we delve into the experiences and lesson learned by a panel of actuaries who apply their actuarial skillset in banking. The panelists with diverse background and experience and brings a unique perspective. Anyone with an interest in working in the banking sector can benefit from understanding some of the challenges, pathways and benefits of making this transition.

While “actuary” may not appear in their job title, 250 of our members are employed in the banking sector–and the value of actuarial education is clear in their success. Over the past few years, the Institute has given renewed focus to banking, both within the education program and at a committee level. The […]

“Actuaries have the ability to quantify a situation so that there is comfort in the way forward.”I started as an actuarial analyst in Life insurance and annuities; to later move to superannuation&investments. It was investments that then defined the next 15 years of my life–from bond analyst to new product- […]

Hear from leading Australian author of thrillers and Non-Executive Director John M Green on the questions you should ask and how you can craft your scenario narratives to better engage management and boards in the risk discussions every organisation needs to have. Joining him in this session is Actuary/Director, Finity Estelle Pearson.

Digitisation can be more than enhancing processes and cutting costs. It’s about creating new way to understand and reach your customer, reshaping business models and upending traditional views of the customers experience. In this session actuary Iwan Juwono, Head of Insurances at Grab Insure Business and Frankie Chan, Head of Programme Value Optimisation, Air & Insurance, Cathay Pacific Airways explore how data science and AI is transforming their businesses.

Hear from leading Australian author of thrillers and Non-Executive Director John M Green on the questions you should ask and how you can craft your scenario narratives to better engage management and boards in the risk discussions every organisation needs to have. Joining him in this session is Actuary/Director, Finity Estelle Pearson.

Digitisation can be more than enhancing processes and cutting costs. It’s about creating new way to understand and reach your customer, reshaping business models and upending traditional views of the customers experience. In this session actuary Iwan Juwono, Head of Insurances at Grab Insure Business and Frankie Chan, Head of Programme Value Optimisation, Air & Insurance, Cathay Pacific Airways explore how data science and AI is transforming their businesses.

Many actuarial associations across the world appear to have adopted the professionalism model that combines initial qualification plus experience backed up by on-going continuous professional development. The approach taken to assist members continue their lifelong learning possibly varies across actuarial societies. All members in our Institute are bound by Professional Standard 1: Continuing Professional Development. This talk will compare our approach with the approach taken by three other actuarial societies – the Actuarial Society of South Africa, the Institute and Faculty of Actuaries and the Society of Actuaries. The presentation will consider possible actions by the Institute to increase the member-value proposition and assist in promoting lifelong learning.

Our presentation will explore the following key areas of recent developments in external audits: • The role of an external auditor (or Appointed Auditor in the case of insurance companies), an auditor’s expert vs. an audit specialist, and how this affects reserving, provisioning, and other finance function practices, including the work of the primary actuary (or the Appointed Actuary in the case of insurance companies). • Emphasis of an external audit on the performance of procedures (an action not an outcome) and identification of misstatements, how this has diverged significantly from the traditional emphasis of external peer reviews on the overall reasonableness of the primary actuary’s advice (an outcome), how the overall reasonableness of the actuary’s advice does not automatically lead to the absence of misstatements. • Current auditing standards, in particular ISA 540 and ISA 620, and how they translate to requirements on both the auditor (e.g., the audit actuary) and management’s expert (e.g., the actuarial reserving team or external consulting actuary). • What are different types of misstatements, implications of identifying misstatements on the primary actuary, regulatory implications of not identifying misstatements on the auditor, and how this drives professional behaviour from accounting and actuarial professionals across the financial services industry, and implications on professional actuarial practice. • The need for documentation and evidence-keeping, how this differs from traditional understandings of “judgement” among actuaries, treatment of “judgement” as speculation under emerging audit practices, and implications on professional actuarial practice. We then present a series of case studies, based on real-life examples (incorporating experience gained from interacting with the regulator ASIC on real-life matters), across all practice areas (general insurance, life insurance, banking), and what these mean for professional actuarial practice in these practice areas: • Selection of assumptions, how the materiality of assumptions is assessed, the type and amount of evidence required, and limits of traditional methods such as actuarial “judgement”, averaging and approximations. • Use of industry benchmarks vs. speculation, use of authoritative professional studies (including those performed by the Actuaries Institute), the appropriateness of external sources and the need to evaluate them. • Scope of the primary actuary’s work, including keeping records, ascertaining the validity of non-financial sources (e.g., premium obligations), the need to follow relevant accounting standards including non-insurance-specific accounting standards (e.g., performance of materiality analyses), mathematical integrity, etc. and situations where the role of management’s expert is divided across in-house actuaries, actuaries working for the parent entity and external consulting firm/s. • What is an audit procedure, and examples of traditional actuarial concepts or professional standards that conflict with audit procedures (e.g., an audit is not a “review”), and what this means for primary actuaries and finance functions. These case studies will bring to life how developments in audit and regulatory practices have important practical implications on how actuaries perform their work across all practice areas.

Many actuarial associations across the world appear to have adopted the professionalism model that combines initial qualification plus experience backed up by on-going continuous professional development. The approach taken to assist members continue their lifelong learning possibly varies across actuarial societies. All members in our Institute are bound by Professional Standard 1: Continuing Professional Development. This talk will compare our approach with the approach taken by three other actuarial societies – the Actuarial Society of South Africa, the Institute and Faculty of Actuaries and the Society of Actuaries. The presentation will consider possible actions by the Institute to increase the member-value proposition and assist in promoting lifelong learning.

Our presentation will explore the following key areas of recent developments in external audits: • The role of an external auditor (or Appointed Auditor in the case of insurance companies), an auditor’s expert vs. an audit specialist, and how this affects reserving, provisioning, and other finance function practices, including the work of the primary actuary (or the Appointed Actuary in the case of insurance companies). • Emphasis of an external audit on the performance of procedures (an action not an outcome) and identification of misstatements, how this has diverged significantly from the traditional emphasis of external peer reviews on the overall reasonableness of the primary actuary’s advice (an outcome), how the overall reasonableness of the actuary’s advice does not automatically lead to the absence of misstatements. • Current auditing standards, in particular ISA 540 and ISA 620, and how they translate to requirements on both the auditor (e.g., the audit actuary) and management’s expert (e.g., the actuarial reserving team or external consulting actuary). • What are different types of misstatements, implications of identifying misstatements on the primary actuary, regulatory implications of not identifying misstatements on the auditor, and how this drives professional behaviour from accounting and actuarial professionals across the financial services industry, and implications on professional actuarial practice. • The need for documentation and evidence-keeping, how this differs from traditional understandings of “judgement” among actuaries, treatment of “judgement” as speculation under emerging audit practices, and implications on professional actuarial practice. We then present a series of case studies, based on real-life examples (incorporating experience gained from interacting with the regulator ASIC on real-life matters), across all practice areas (general insurance, life insurance, banking), and what these mean for professional actuarial practice in these practice areas: • Selection of assumptions, how the materiality of assumptions is assessed, the type and amount of evidence required, and limits of traditional methods such as actuarial “judgement”, averaging and approximations. • Use of industry benchmarks vs. speculation, use of authoritative professional studies (including those performed by the Actuaries Institute), the appropriateness of external sources and the need to evaluate them. • Scope of the primary actuary’s work, including keeping records, ascertaining the validity of non-financial sources (e.g., premium obligations), the need to follow relevant accounting standards including non-insurance-specific accounting standards (e.g., performance of materiality analyses), mathematical integrity, etc. and situations where the role of management’s expert is divided across in-house actuaries, actuaries working for the parent entity and external consulting firm/s. • What is an audit procedure, and examples of traditional actuarial concepts or professional standards that conflict with audit procedures (e.g., an audit is not a “review”), and what this means for primary actuaries and finance functions. These case studies will bring to life how developments in audit and regulatory practices have important practical implications on how actuaries perform their work across all practice areas.

As the effects of climate change become better understood and the need to address this issue becomes more pressing, the expectations on financial services firms, and banks in particular, will continue to increase. Prudential regulators, central banks, customers, investors and funders each have unique perspectives and requirements on the banks they deal with. This paper is a practical guide for banks on how they should integrate climate risk management into their broader risk management frameworks. The body of knowledge around climate risks and how these will impact a bank's consumer and corporate customers continues to grow. This has spurred the development of datasets, models, and frameworks that are available to banks. The Intergovernmental Panel on Climate Change (IPCC) has conducted extensive research on climate change. The Network for Greening the Financial System (NGFS) have expanded on the IPCC’s work, creating broad climate scenarios that have become the industry standard for the banking sector. There is extensive research on physical risk. Physical risk is also foremost on government and community concern given the impacts that extreme weather events have on individual lives. Weather related damage to property and critical infrastructure is immediately visible. Transition risks on the other hand do not carry the same visceral impact on society as physical risks do, and have hence been overshadowed in climate research. Transition risk modelling tends to be conducted at industry sector level with models producing impacts on broad macroeconomic variables. Itis however left to banks to develop approaches to apply this to their actual portfolio. Whilst most regulators around the world have enforced transition risk modelling exercises for their major banks, including APRA with its Climate Vulnerability Assessment (CVA),there is significant divergence on how broad scenarios are translated to impacts on credit risk. The framework for climate scenario analysis continuesto evolve. Traditional stress tests are very different in nature to climate scenarios and banks need to change their thinking when incorporating climate related risks into their risk management framework. Traditional stress tests often feature a financialshock defined by changes in key macroeconomic variables relative to a baseline. Climate scenarios generally model smoothened macroeconomic pathways over a longer timeframe. In traditional stress tests, these crisis or shocks recover and the economic variables revert back to pre - crisis levels. Climate scenarios on the other hand continue to arrive at new baselines, as we continue to pass irreversible tipping points. More recently regulators have been considering the interactions between the climate change induced shocks and broader business cycle impacts. Both physical or transition risk can precipitate or heighten a business cycle shock. This paper will recommend practical ways in which banks can integrate climate risk related risks into their boarder risk management frameworks. A key focus of this paper is the integration into the credit riskmanagement framework. Ultimately the management of climate risk should be relevant to a bank’s portfolio. Further, this paper will outline how climate change related risk can be incorporated in operational processes such as credit risk underwriting, provisioning and stress testing.

The Retirement Income Review explicitly called out the role of the home as an asset for retirees when considering their options in funding a sustainable retirement income. While many people by default consider the more popular approach of downsizing (I.e. selling the home and freeing up equity), there exists both public and private market options for using structured financial products (such as reverse mortgages, or the Federal Government’s Home Equity Access Scheme) to achieve similar outcomes. Indeed, these are not necessarily set and forget strategies but can be used in advance of an ultimate downsizing decision and remain fluid options throughout retirement. However, this sector is often met with considerable negativity which it has been detrimental to the take up of the product. But many of the regulatory and consumer protection pieces are in place, and that is why there has been renewed interest and activity in this sector, from local and international insurers (mainly as strategic investors rather than product providers… at this stage). This presentation will cover: • What is the potential size of this opportunity in Australia (and how is it growing overseas) • What is the current structure of the sector (providers, products) • What are the key consumer benefits being realised • What is a potential role for insurers (and super funds) in this product sector We will also show how this can operate in a visual retirement income calculator alongside superannuation balances, pension (part and/or full) and other products to demonstrate how it can supplement income for retirees.

As the effects of climate change become better understood and the need to address this issue becomes more pressing, the expectations on financial services firms, and banks in particular, will continue to increase. Prudential regulators, central banks, customers, investors and funders each have unique perspectives and requirements on the banks they deal with. This paper is a practical guide for banks on how they should integrate climate risk management into their broader risk management frameworks. The body of knowledge around climate risks and how these will impact a bank's consumer and corporate customers continues to grow. This has spurred the development of datasets, models, and frameworks that are available to banks. The Intergovernmental Panel on Climate Change (IPCC) has conducted extensive research on climate change. The Network for Greening the Financial System (NGFS) have expanded on the IPCC’s work, creating broad climate scenarios that have become the industry standard for the banking sector. There is extensive research on physical risk. Physical risk is also foremost on government and community concern given the impacts that extreme weather events have on individual lives. Weather related damage to property and critical infrastructure is immediately visible. Transition risks on the other hand do not carry the same visceral impact on society as physical risks do, and have hence been overshadowed in climate research. Transition risk modelling tends to be conducted at industry sector level with models producing impacts on broad macroeconomic variables. Itis however left to banks to develop approaches to apply this to their actual portfolio. Whilst most regulators around the world have enforced transition risk modelling exercises for their major banks, including APRA with its Climate Vulnerability Assessment (CVA),there is significant divergence on how broad scenarios are translated to impacts on credit risk. The framework for climate scenario analysis continuesto evolve. Traditional stress tests are very different in nature to climate scenarios and banks need to change their thinking when incorporating climate related risks into their risk management framework. Traditional stress tests often feature a financialshock defined by changes in key macroeconomic variables relative to a baseline. Climate scenarios generally model smoothened macroeconomic pathways over a longer timeframe. In traditional stress tests, these crisis or shocks recover and the economic variables revert back to pre - crisis levels. Climate scenarios on the other hand continue to arrive at new baselines, as we continue to pass irreversible tipping points. More recently regulators have been considering the interactions between the climate change induced shocks and broader business cycle impacts. Both physical or transition risk can precipitate or heighten a business cycle shock. This paper will recommend practical ways in which banks can integrate climate risk related risks into their boarder risk management frameworks. A key focus of this paper is the integration into the credit riskmanagement framework. Ultimately the management of climate risk should be relevant to a bank’s portfolio. Further, this paper will outline how climate change related risk can be incorporated in operational processes such as credit risk underwriting, provisioning and stress testing.

As the effects of climate change become better understood and the need to address this issue becomes more pressing, the expectations on financial services firms, and banks in particular, will continue to increase. Prudential regulators, central banks, customers, investors, and funders each have unique perspectives and requirements on the banks they deal with. This paper is a practical guide for banks on how they should integrate climate risk management into their broader risk management frameworks, with a focus on residential lending.

From pioneering roles at esteemed institutions to groundbreaking research that reshaped the landscape of finance and insurance, Michael Sherris’career has been nothing short of remarkable. In an exclusive interview, Michael shares his career journey, milestones, accolades and invaluable learnings, unveiling the indelible mark he’s made on the landscape of actuarial science. For those who […]