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Busy and Exciting Time for ERM Practitioners

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The CIA’s Enterprise Risk Management Applications Committee (ERMAC)
was set up to promote the application of actuarial science to ERM and market actuaries as knowledgeable experts in this field. As its chair, Shannon Patershuk (pictured) is leading the charge to achieve the ERMAC’s expansive set of goals.

She said: "I come from a traditional path, through group insurance and pensions. There is a big difference between that work and the ERMAC, because ERM is all inclusive and deals with all risks. The complexity makes it challenging and thereby quite interesting. In addition, the range of expertise required brings us a diverse cast of volunteers and working with them is very rewarding. You might say there is a good risk–reward trade-off."

The committee pursues a number of initiatives, including:
  • Producing marketing material to promote actuaries as risk management professionals;
  • Talking to employer and industry groups and other professional associations to encourage more use of actuarial techniques;
  • Identifying ideas for new research that will draw attention to actuaries’ work; and
  • Communicating existing research and case studies via webcasts, meetings, and other avenues.
For Ms. Patershuk—who holds FCIA, FSA, and CERA designations and works in retiree program relations for Johnson Inc.—chairing the ERMAC is only the latest milestone in a career that involved ERM at an early stage.

She said: "I’ve always been interested in risk management. In the 1980s, when interest rates were peaking at 18 percent, I was working at Great West Life in corporate life and asset matching came to the fore. Tail risk was important, and it showed that things can happen for which we really need to be prepared. Later, I was working in the voluntary retirement market, which seemed to get more and more complex. When the Chartered Enterprise Risk Analyst designation was first offered in 2008, it looked interesting and necessary, and I qualified based on my experience. Now I am still working in the retirement benefit area, but when the opportunity to join ERMAC came along, I jumped at it. The learning curve is steep but it is very interesting; my role as chair is to grow interest among all practitioners, and when there are a lot of moving parts it can be challenging to create a workable structure."

Ms. Patershuk, who has already enjoyed responsibilities such as insurance consulting, providing expert testimony, and developing pricing models, said that her latest goal was to help ERM expertise spread throughout all sectors and expand the network of actuaries working in this burgeoning area.

She added: "The pace of change has increased. Risks are interconnected on a global basis, and without a central focus, decision making in organizations can be lacking or flawed. It is essential to have people who can assess all types of risks on an integrated basis, and long-term financial security requires a well-designed framework. Pay-as-you-go funding doesn’t work, so ‘risk-as-you-go’ funding doesn’t work.

"The scope of work in ERM is virtually unlimited. ERM looks not only at the financial risks but also things like strategic risks and governance risks. In addition, ERM can be applied not just at the organizational level but also at the country level. When she was CIA President, Micheline Dionne was quoted as saying how valuable it would be to have a country risk officer. Given the vast and expanding opportunities in ERM and the strong risk management skills embedded in the DNA of actuaries—members of the world’s oldest risk profession—it is vital that more actuaries get involved in ERM. Within the financial sector, it is a more natural and logical step for actuaries to move into ERM. In the non-financial sector, it may be a bit more of a leap, but it is not at all unrealistic; even companies like Bombardier now have actuaries working for them. This is an exciting time for actuaries in ERM. I can see a time when it will be de rigueur for large non-financial companies to have actuaries working on their ERM programs."

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