Risk Index Under Development

The Risk Index Task Force (RITF) is planning to launch a new project to bring greater public visibility to actuaries and the risk management field. Working in conjunction with the Risk Management Section (a joint section of the SOA and the Casualty Actuarial Society), the RITF is looking for help to make this project a success.

The key idea is to develop a risk index, or a set of risk indices, that could ultimately become a standard reference point for any business leader who is making important business decisions. Most actuaries have heard of the CPI and various stock price indices. RITF's goal is to develop the "Actuarial Risk Index." The first step in the project is to conduct research on what kinds of risk indices already exist and on what methodologies are being used to develop such indices. The RITF has developed a short illustrative list of some indices that are readily available. The task force is trying to build a comprehensive list of potentially useful indices and is asking for assistance in expanding the list. Some examples of indices and research that have been identified to this point are:

• The "Corporate Risk Barometer" from the Economic Intelligence Unit
• The "Catastrophic Risk Exposure Index" from the International Institute for Applied Systems Analysis
• Risk Index Exposures of the S&P 500 from BARRA

The Task Force is also looking for help with developing a methodology for building an index. The index could be based on existing indices or other information. RITF welcomes any ideas that may contribute to this project. Please send all your comments and suggestions to Kimberly Wargin at the SOA office. Risk Management Section Council member Doug Brooks chairs the RITF and CAS member Todd Bault serves on the task force.