In this paper we examine two aspects of extreme events: their calculation and their communication. In relation to calculation, there are two types of extreme events that are considered.

The first is the extent to which extreme events in two or more variables occur together. This can be gauged by using measures of tail association. Higher levels of tail association are useful for highlighting the extent to which there are concentrations of risk. We investigate the range of approaches used to measure tail association and propose a pragmatic alternative, the coefficient of finite tail dependence.

The second type of extreme event arises from combinations of losses from a series of risks that together result in total losses exceeding a particular level. This is measured using ruin lines or, in higher dimensions, planes and hyperplanes. The probability of ruin and the economic cost of ruin are considered here. In this context, it is important to consider what the term “loss” actually means, and whether it is in relation to a current set of exposures or a potential strategy.

The communication of extreme events is discussed not just in terms of the numbers that can be used, but in terms of the graphical methods that can be used to aggregate information on a range of risk combinations. This involves communicating not just the level of risk but also the importance of the risk considered.

This abstract relates to the following paper:

SweetingP. and FotiouF.Calculating and communicating tail association and the risk of extreme loss ‐ Abstract of the London DiscussionBritish Actuarial Journal, doi:10.1017/S1357321712000347

Risk terminology varies from organisation to organisation, and actuaries working in different organisations may use different terms to refer to the same risk, or use the same nomenclature for completely different risks. This paper sets out a classification system developed by the Risk Classification Working Party for the Profession that can be used as a common reference point for discussing risk. Actuaries will not be required to use this system, but it is hoped that common terminology will reduce the possibility of confusion in discussing risks.

This abstract relates to the following paper:

KelliherP.O.J., WilmotD., VijJ. and KlumpesP.J.M.A common risk classification system for the Actuarial Profession ‐ Abstract of the London discussionBritish Actuarial Journal, doi:10.1017/S1357321712000293

This abstract relates to the following paper:

KelliherP.O.J., WilmotD., VijJ. and KlumpesP.J.M.A common risk classification system for the Actuarial Profession ‐ Abstract of the Edinburgh discussionBritish Actuarial Journal, doi:10.1017/S1357321712000293

The Management Board of the UK Actuarial Profession has identified enterprise risk management (ERM) as an area of growth, particularly within the financial sector. It is an area which offers opportunities for actuaries, working with other disciplines, to move out of their traditional sectors of employment, with the skill set required fitting well with an actuary's training and practical focus.

Members of the Profession also highlighted ERM as one of the two main areas where they wanted the Profession to focus their research efforts in the membership survey in 2009. Consequentially the Management Board allocated funds to support research projects in ERM in 2010–2011 and has worked with the ERM Practice Area Committee to identify the topics that they feel most suited to external research where the outputs will have a broad strategic value to the financial services sector.

This abstract relates to the following paper:

AllanN., CantleN., GodfreyP. and YinY.A review of the use of complex systems applied to risk appetite and emerging risks in ERM practice ‐ Abstract of the London discussionBritish Actuarial Journal, doi:10.1017/S135732171200030X

This abstract relates to the following paper:

AllanN., CantleN., GodfreyP. and YinY.A review of the use of complex systems applied to risk appetite and emerging risks in ERM Practice ‐ Abstract of the Edinburgh DiscussionBritish Actuarial Journal, doi:10.1017/S135732171200030X