Translations of certain IAA papers have been made by local member associations or members. The IAA has neither reviewed nor endorsed them. However, we are providing them on our website as a service to members.

  Climate-Related Scenarios Applied to Insurers and Other Financial Institutions - August 2021 - This paper is the third of a series of papers that will be developed, aimed at creating awareness and promoting actuarial approaches in climate-related risk management and reporting. The first paper Importance of Climate-Related Risks for Actuaries, and the second paper Introduction to Climate-Related Scenarios were released in September 2020 and February 2021 respectively.

This third paper continues the discussion begun in the second paper in the series, by considering as a starting point the process of using scenarios at the level of an individual insurer or other financial institution at the national level.  It examines the challenges faced by actuaries in implementing scenario analysis for climate-related risks and outlines a range of possible approaches. 

Three simplified case studies are included to illustrate the concepts developed in this paper. These case studies have been chosen to stimulate broad thinking rather than to focus on an approach taken by a specific financial institution or for specific blocks of business. It is hoped this paper can assist actuaries and others to understand the building blocks of climate-related scenarios and how they can be used to inform many critical risk management functions surrounding climate-related risks. 
 Glossary of Defined Terms Used in IAA Climate-Related Risk Publications

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  Opportunities for Applying Actuarial Techniques in Banking - July 2021 - The paper is intended to provide useful, educational reading for actuaries working in the banking industry, both as a reference point and for purposes of continuous professional development (CPD). It may also be useful for non-actuaries working in banking risk management, actuaries considering working in banking, and actuarial associations considering an involvement in the domain of banking. The paper highlights areas where actuaries are already involved, and areas where they may become involved.

We believe that this paper fills a gap that no similar paper on actuarial practice in banking has addressed.

The paper draws on the developments in recent years in a number of jurisdictions around the world where actuaries are increasingly involved in banking. It illustrates the application of actuarial techniques in banking in different jurisdictions, including South Africa, Australia, North America and the United Kingdom. With appropriate amendments, the techniques may prove useful when applied to requirements of national, regional or supranational regulatory requirements such as  those of the Basel Committee on Banking Supervision.

This is a working paper, which is expected to be reviewed and updated over time as more techniques in banking relevant to actuaries are developed and/or identified.
  Mortality by Causes of Death - June 2021 - The study of mortality is a keystone of actuarial activity. Mortality studies identify and compare patterns and trends in historical data, which may change for many reasons, with the objective of projecting these into the future. This paper discusses mortality differences by causes of death (CODs). As mortality by each COD can exhibit different patterns from other CODs and from the mortality pattern of the total population, a detailed study of mortality by COD enables a deeper understanding of overall patterns, and can therefore guide actuaries and decision-makers more reliably.

Mainly using data from 1950 until recent years, mortality data by COD, country, gender and time was taken from two major sources that effectively adhere to the International Classification of Diseases Version 10 (ICD-10): the Human Cause-of-Death Database with data from 16 countries, and the Cause of Death section of the Human Mortality Database with data from 8 countries. 

The paper attempts to provide a comprehensive observation of mortality by COD, drawn from these two databases. The CODs have been re-grouped in order to make the information from the two databases more consistent, and also to point out CODs that may be of interest in mortality projections. The paper discusses a number of topics for further development and consideration and gives some indication of the directions which could be taken.

Webinar held on July 14, 2021

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  Introduction to Climate-Related Scenarios - February 2021 - This paper is the second of a series of papers that will be developed, aimed at creating awareness and promoting actuarial approaches in climate-related risk management and reporting. The first paper - Importance of Climate-Related Risks for Actuaries – was released in September 2020.

This second paper aims to provide background covering the principles and outlining the processes for developing climate-related scenarios. It focuses on climate-related financial risks but does not cover the scientific basis of climate change beyond what is necessary for understanding its impacts. It aims to help actuaries and risk managers to acquire the basic vocabulary of climate science. It particularly serves those less familiar with the details of climate research who wish to develop or use climate-related scenarios.

The paper provides helpful insights into the requirements for good scenario analysis, components from which scenarios can be assembled, and considers some of the tools available to actuaries. It reviews the challenges and barriers that need to be considered in the development or use of workable climate-related scenarios and how those barriers may impact planning and implementation of adaptation actions and building resilience.

 Glossary of Defined Terms Used in IAA Climate-Related Risk Publications

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  Pension Fund Environmental, Social and Governance (ESG) Risk Disclosures: Developing Global Practice - December 2020 - This paper summarizes the main features and trends in pension fund ESG risk disclosures around the world available to regulators, members and the public. Pension fund ESG risks are important in terms of long-term fund performance and delivering members’ benefits, as well as in relation to wider societal impacts, and this is a rapidly developing area. Based on the information gathered via a survey of 14 countries, the paper looks at how local legislation, type of pension fund, size, structure and available resources, among other factors, affect pension funds engaging in ESG disclosures.

The paper highlights important issues and trends relating to ESG disclosures that actuaries involved with pension funds, whether as trustees, investment managers, investment consultants or advisers on funding or governance, should  be aware of, so that they can ensure their clients or employers address the challenges on a timely basis. It is also relevant to the wider pension fund community.

Webinar on January 21, 2021

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  Risks to Water Resources - November 2020 - Since water resources are critical for human survival, even short-term disruptions in the supply of water can have potentially devastating consequences, including adverse impacts on financial security systems. The main purpose of this paper is to start a discussion on water resource risk among actuaries before addressing the broader scientific and public policy communities. We believe that actuaries need to be informed about how water resource risks affect a wide range of perils commonly insured, including life, health, property and agriculture. 

The paper illustrates the central risks by considering three representative systems in New York City, Mexico City and India. It goes on to illustrate best-practice actuarial risk management techniques, applied in a context outside the traditional actuarial domain. The paper employs what we believe to be best-practice actuarial risk management techniques, applied in a context outside the traditional actuarial domain. It may therefore serve as a useful educational tool, and a showcase for the profession’s risk management capabilities.

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  Actuarial Perspectives on World Population Prospects 2019 - October 2020 - This paper provides an overall actuarial perspective on the United Nations (UN) World Population Prospects 2019 (WPP2019).  WPP2019 presents the latest revision of population projections for the world and for individual countries, groups of countries and regions, summarizing estimates for 1950 to 2019 and projections from 2020 to 2100.

This paper aims to inform actuaries around the world about the possible evolution of the world’s population based on the UN report. The paper discusses the methodologies used in WPP2019 and the assumptions underlying the projections. It identifies some areas of particularly great uncertainty that should be considered when using these projections in actuarial work such as developing population projections for applications in individual countries and financial reviews of social security plans. The paper also aims to summarize some of the key features of the results of WPP2019 in a way which will interest and inform actuaries, as well as a wider audience of organizations with which the IAA interacts.

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  Paper on Quality Assurance and Governance Initiatives on IFRS 17 - September 2020 - Over the past 20 years, the IAA has given significant input to the development of the International Financial Reporting Standard 17, Insurance Contracts (IFRS 17) and has gained significant insight into the challenges and key approaches of reporting under IFRS 17 and the role of the actuary in that reporting process. The IAA believes that many stakeholders could benefit from insights gained by actuaries over the years. The paper presents what the IAA views as good practices that could be followed to improve quality, credibility and public confidence in information disclosed in financial statements prepared in compliance with IFRS 17 thereby serving the public interest.

With a view to good practice, the IAA advocates the production of internal reports that set out the work performed under the applicable standards of actuarial practice for IFRS 17 purposes and are duly signed-off by appropriately qualified actuaries. The IAA considers that such reporting will be of value to insurers and their auditors by improving the quality and credibility of the financial statements and / or the audit opinion, thereby enhancing public confidence in insurers’ financial statements.  

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  Importance of Climate-Related Risks for Actuaries - September 2020 - Climate-related risk has the potential to seriously affect the entire world. The degree and timing of upcoming changes in our climate involve a great deal of uncertainty, creating widespread concern about its recent and potential impacts under alternative possible scenarios. Even if the most severe climate-related risk scenarios do not materialize, many financial institutions and most individuals will nevertheless be affected. A range of effects is now being actively considered by governments, regulators, the insurance and reinsurance industries, pension plans and other entities.

This paper is the first of a series of papers aimed at creating awareness and promoting actuarial approaches in climate-related risk management and reporting.

This first paper discusses the main components of the climate-related risks relevant to actuaries, their implications, the broad categories of actuarial work and the importance of climate-related risk to each category. The categories considered are actuarial modelling, product management, risk and capital management, investment management, and disclosure.   The paper concludes suggesting several next steps to consider moving forward.

 Glossary of Defined Terms Used in IAA Climate-Related Risk Publications

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  Climate Change, Insurance and Vulnerable Populations - October 2019 - The primary objective of this paper is to provide useful information concerning the extent to which private- and public-sector insurance can, using appropriate tools and models, address the needs of vulnerable populations regarding the adverse effects of climate change. The message provided by this paper is that private- and public-sector insurance programs can play a key role in addressing climate-related risks, though some of these programs have inherent limitations and cannot work effectively by themselves in all circumstances.

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  Flood Risk - June 2019 - This paper provides a description of flood risk and how it can be managed. It is intended to provide a fundamental background and encourage discussion on this important topic for use by actuaries, regulators, and public policy planners around the world. Aspects covered include: the entire flood risk management process, methods that can be used to assess, mitigate, and finance the risks involved, the role of insurance and governments, public policy implications, and the role of actuaries. Floods are a major threat to life, health and property across the world, making the methods of mitigating and financing them vitally important. A wide variety of approaches to manage this risk have been taken by both the private and public sectors, the best combination of which has to be determined by each country. It is the desire of the REWG that the principles considered in this paper can be effectively utilized by each country. 

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  Interaction Between Pension and Housing - February 2019 - This paper discusses the current trends of Retirement Income Systems in several developed countries. It then explores the characteristics of the housing markets in these countries. The paper’s objectives include an exploration of the role of housing in providing retirement wealth and income. It sets out instances where consideration of both pensions and housing simultaneously can lead to favourable outcomes.
It is hoped that this paper will encourage a long-term broadening of actuarial activity in three areas. First, that actuaries already involved in Retirement Income Systems (both as practitioners and influencers of public policy) will incorporate housing into their framework, along with pensions and social security arrangements. Second, that those actuaries that advise individuals on pension issues will also consider housing implications. Third, while there are a small number of actuaries already involved with housing (for example, through bank financing), there is scope for significantly more actuarial involvement in the many facets of housing, such as financing (current and innovative), supply and demand, taxation and social issues. It is also hoped that increased public discussion will be held regarding the relationship between housing and Retirement Income Systems.

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  Assessing Risk and Proportionate Actuarial Services in Inclusive Insurance Markets — An Educational Paper and Toolkit - November 2018 - Around the world, people from a low-income background are vulnerable to a variety of risks due to their working and personal conditions. They often face the risk of falling into hardship due to the lack of social safety nets. If structured appropriately, insurance can play an important role in helping low-income people manage such risks. This is the context of inclusive insurance, which encompasses microinsurance. The goal of inclusive insurance is to provide financial protection against risks in a way that is affordable, sustainable, responsible and accessible by all types of customers, particularly customers from a low-income background.

This educational paper and toolkit fulfil the recommendation in the IAA Issues Paper “Addressing the Gap in Actuarial Services in Inclusive Insurance Markets”, by addressing three key questions regarding the application of proportionate actuarial services in inclusive insurance:

  • How does one identify the key insurance risks in terms of a product or a provider?
  • What actuarial or other advice or services are needed to manage these risks?
  • What level of actuarial skills, if any, is needed to deliver the actuarial advice or service?

This paper is an outcome of a joint project between the IAA and the International Association of Insurance Supervisors (IAIS) to develop frameworks to support the proportionate prudential regulation and application of proportionate actuarial services in inclusive insurance markets. This paper should be read in conjunction with the expected IAIS material.

Toolkit Contents: Tool / Health & Life Product / Mobile Hospital Cash Product / Social Health Product

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  Decarbonization: A Briefing for Actuaries - September 2018 - This paper provides an introduction to the topic of decarbonization for actuaries around the world. Aspects covered include: the main types and sources of greenhouse gas emissions; relevant international agreements; commitments made; the policies adopted; likely future developments; and, observations on potential actuarial implications. While decarbonization will increasingly affect every economy and will transform how and what goods are produced and services are provided, the timing and progress of change is highly uncertain.

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  Defined Benefit Pension Plan Funding and the Role of Actuaries - May 2018 - This monograph considers the funding of defined benefit (DB) pension plans and specifically the prefunding of DB pension plans rather than pay-as-you-go systems. It looks at some of the key questions that arise when considering how pension plans are funded and the role of actuaries in helping to answer these questions. It looks too at some of the key drivers for different approaches to pension plan funding. It uses the term pension plan to refer to the legal entity or arrangement that is used to deliver the pension benefit. This monograph is educational rather than representing any form of guidance. Any proposals made are subject to the relevant actuary’s judgement in the circumstances of a particular situation.
Measuring and Reporting Actuarial Obligations of Social Security Systems Measuring and Reporting Actuarial Obligations of Social Security Systems - March 2018 - Many accounting and statistical agencies and institutions have already issued or are considering issuing guidelines on measuring and reporting actuarial obligations of social security systems. This is a principles-based paper presenting the Social Security Committee's perspectives on measurement and reporting of actuarial obligations of SSRSs and emphasizes the importance of relevant disclosures.
Climate Change and Mortality

Climate Change and Mortality - This discussion paper was prepared by the Resources and Environment Working Group of the IAA - November 2017 - Climate change will have significant and wide-ranging effects around the world. One important impact is on the mortality of the population, which is the focus of this paper.

Webinar Recording: link to Youtube 

The Impact of Personalised Medicine and Genomics on the Insurance Industry The Impact of Personalised Medicine and Genomics on the Insurance Industry - April 2017 - Personalised Medicine is attracting serious attention at many levels internationally. This paper developed by the Health Committee of the IAA discusses personalised medicine, the future of genomics, current challenges, impact of genomics on the insurance industry and recommendations for actuaries.
An Actuarial Perspective on Societal and Personal Challenges Long-Term Care: An Actuarial Perspective on Societal and Personal Challenges - April 2017 - Long-Term Care (LTC) is an important and complex issue that everyone should be concerned with, either at the societal, business or personal level. This paper provides information concerning some of the key issues associated with LTC, recognising that there are significant differences throughout the world in how LTC is delivered and financed.
Determination of Retirement and Eligibility Ages

Determination of Retirement and Eligibility Ages: Actuarial, Social and Economic Impacts - March 2016 - This Paper has been produced by the Population Issues Working Group of the Scientific Committee of the IAA. We extend our sincere thanks to the members of the drafting team: Morteza Aalabaf-Sabaghi, Yair Babad, Assia Billig, Sam Gutterman and Martin Stevenson

Joint Synthesis Paper by IOPS and IAA

Joint Synthesis Paper by IOPS and IAA: The role of actuarial calculations and reviews in pension supervision. By Sherika L.L. Ellis, Esko Kivisaari and Dariusz Stanko - September 2015

Joint Background Paper by IOPS and IAA Joint Background Paper by IOPS and IAA: The role of actuarial calculations and reviews in pension supervision. By Sherika L.L. Ellis, Esko Kivisaari and Dariusz Stanko - September 2015
Actuarial Aspects of ERM for Insurance Companies Actuarial Aspects of ERM for Insurance Companies - The purpose of this paper is to provide assistance to actuaries or other practitioners in relation to Enterprise Risk Management (ERM). The objective is to assist practitioners, and to help to achieve greater consistency in relation to knowledge and awareness of various topics. This paper has been produced by the Enterprise and Financial Risk Committee of the IAA.
IAA Risk Book

IAA Risk Book - Governance, Management and Regulation of Insurance Operations - This is a collection of papers that has been produced and approved by the Insurance Regulation Committee of the International Actuarial Association (IAA) - Published 30 September 2015

Webinar Presentation Link to recordingPaper

Deriving Value from ORSA

Deriving Value from ORSA - Board Perspective - An Executive Board has a significant role to play in overseeing management's assessments of risk and solvency and in challenging ORSA results as they are communicated by management. The purpose of this paper is to provide members of the Board insight into the value of the ORSA process, regardless of the specific implementation and requirements for ORSA in a given regulatory environment and to establish Board expectations for the information that senior management should routinely communicate to them.

Analysis on the Risk of Ebola Analysis on the Risk of Ebola — This is an analysis on an evaluation of the mortality and morbidity risk of Ebola to life and health insurance companies1 . The actuarial profession has played an active role in developing models and advising on the impact of epidemics on mortality and morbidity risks, particularly in the context of the HIV/AIDS epidemic in the 1980s and beyond. Whilst this does not go into the same level of detail or sophistication, the aim of this high-level analysis is to assist actuaries working for or consulting with life or health insurance companies on evaluating the risk of an Ebola epidemic to their companies or clients.
Addressing the Gap in Actuarial Services in Inclusive Insurance Markets

Addressing the Gap in Actuarial Services in Inclusive Insurance Markets —This paper outlines the current context and challenges in providing qualified actuarial resources in microinsurance markets and proposes a number of suggestions intended to address these challenges. The paper also explores avenues for further development and collaboration between the IAA and IAIS in this area. The paper identifies a number of key issues in inclusive insurance markets, such as:

  • A need for suitably qualified or experienced professionals;
  • Limited supply of actuarial capacity in microinsurance markets;
  • A lack of understanding of the contribution that actuaries can make to microinsurance programs; and
  • The importance of balancing supply and demand for actuarial services.
Intra-Group Reinsurance Transactions

Intra-Group Reinsurance Transactions — This paper is intended to help readers understand the rationale behind Intra Group Reinsurance Transactions including some of the issues faced in their execution. The paper describes the role of Intra-Group Reinsurance Transactions in managing and steering a (re)insurance group. Intra-Group Reinsurance Transactions, consistent with any reinsurance transactions between two separate legal entities, impact the level and emergence of profit within the two entities as well as the strength of the respective two balance sheets. (Japanese)

Stress Testing and Scenario Analysis

Stress Testing and Scenario Analysis — This paper provides an actuarial perspective on scenario analysis and stress testing. As part of the analysis of risks to the financial condition of a firm, these methods are essential tools for effective risk management and macro prudential oversight. They can enhance the understanding by its stakeholders of the financial vulnerability of the firm. (Japanese).

Actuarial Viewpoints on and Roles in Systemic Risk Regulation in Insurance Markets

Actuarial Viewpoints on and Roles in Systemic Risk Regulation in Insurance Markets — The purpose of this paper is to provide actuaries with the background to address conditions and tools to identify, assess, monitor and mitigate systemic risks. The scope of this paper is limited to global insurance market operations and risks of systemic events in those markets. From the global context, a macro-prudential approach towards the regulation for systemic risk is assumed. The role of actuaries in assisting systemic risk regulators with respect to insurance markets is identified and discussed in a global market context. (Japanese)

Stochastic Projections of the Financial Experience of Social Security Programs: Issues,                         Limitations and Alternatives

Stochastic Projections of the Financial Experience of Social Security Programs: Issues, Limitations and Alternatives — For well over a century, actuaries have projected the financial experience of social security programs around the world. Policymakers – and actuaries themselves – have debated various aspects of these financial projections, such as: (a) the key economic and demographic assumptions, including mortality improvement and fertility trends, on which the projections are based, (b) the duration of the projections, which have ranged from just a few years to 75 or more years, and (c) the treatment of uncertainty by deterministic and stochastic methods. This paper focuses on this last aspect, highlighting key issues related to the application of stochastic models, although the paper also touches on the first two aspects due to their interrelated nature.

Measurement of Liabilities for Insurance Contracts: Current Estimates and Risk Margins
Measurement of Liabilities for Insurance Contracts: Current Estimates and Risk Margins — The ad hoc Risk Margin Working Group (RMWG) of the International Actuarial Association (IAA) has conducted research into the measurement of liabilities for insurance contracts that has resulted in this paper. The issues addressed are those that will help determine future practice for measuring liabilities for insurance contracts for both regulatory and general purpose financial reporting. It focuses on current estimates and risk margins, which the RMWG believes to be an appropriate basis for the measurement of liabilities for insurance contracts. During the course of this research the RMWG has sought and incorporated input from various stakeholders in the measurement of these liabilities. (Online Order Form)
Estimations actuelles et marges du risque
ahora disponible  en español

Blue Book: A Global Framework for Insurer Solvency Assessment — This paper has been prepared for the International Association of Insurance Supervisors (IAIS) to explore the elements needed for an international capital standard for insurers and to provide a “best practices” approach available to all supervisors. It deals with methods the supervisor might use to assess the current financial position as well as to understand the range of possible future financial positions of insurers. Its primary focus is on capital requirements for insurers.(Online Order Form)

Note on Enterprise Risk Management for Pensions

Note on Enterprise Risk Management for Pensions  This paper provides an important summary of the pension industry's perspective on Enterprise Risk Management for capital and solvency purposes in the insurance industry, noting that:

  • in pensions the sponsoring company is generally not an insurance company and therefore pension issues should, in the sponsoring employer, be dealt with in the general framework of ERM, not just in a framework adapted to insurers; and
  • while pensions have much in common with insurance contracts, there are quite a few differences, meaning that the framework adapted to insurers is not directly applicable to pension funds.
Note on the Use of Internal Models for Risk and Capital Management Purposes by Insurers

Note on the Use of Internal Models for Risk and Capital Management Purposes by Insurers  This note provides educational material for those responsible for constructing, using and approving the use of models to assess and manage risk and capital within insurance enterprises (insurers). This material is also useful to those who rely upon the information derived from models, as an aid to understanding the derivation, uses and limitations of this information. Internal models are primarily relied upon by boards of directors and senior management for strategic planning, regular monitoring of risk and managing an insurer’s corporate capital. Internal models are also coming into use for determining regulatory required capital, usually subject to supervisory approval based upon satisfaction of specific conditions required by the supervisor.