Longevity risk remains one of the key issues facing corporate Australia but many businesses are overlooking the key drivers of an effective risk management strategy.
According to the Actuaries Institute, the average life expectancy has doubled over the past 100 years and these statistics need to be factored in for the future of Australia and not just for the products and services segments of the corporate sector.
While continuing to play a vital role in the insurance and finance industry, an increasing number in the actuaries profession are applying their skills more broadly across other business sectors, chief executive Melinda Howes said.
Dramatic changes are taking place in Australia's demographics and businesses are being unnecessarily exposed to strategic risk and governance issues, the Institute said.
"Enterprise risk management is no longer seen as simple a compliance exercise, but rather a critical mechanism to deliver deep insight into the strategic drivers of risk in the business," Howes said.
"This includes upside risk — for example, longevity risk presents super funds and insurers with some great opportunities."
At its upcoming industry summit, the Institute will be sharing insights around whether current management incentives, cooperate structures and the operating environment "are in the best interest of long-term value creation and sustainability of organisations".
