Risk Management Under Pressure – How Actuaries Navigate Global Instability
Recent global events have shown that geopolitical instability is not an abstract concept but a direct influence on financial systems, markets, and societal trust. From military conflicts and trade fragmentation to cyber threats and resource insecurity, the list of interconnected risks is growing. With their systems-based perspective, actuaries are essential in assessing the exposure of insurers and financial institutions to these increasingly complex global dynamics.
According to the OECD Economic Outlook (2025), economic performance across many regions remains fragile. Inflation is receding unevenly, public debt is high, and interest rates remain elevated, with long-term consequences for both insurers and pension funds. This economic volatility demands sophisticated risk modelling that goes beyond historical data. Scenario analysis is becoming more exploratory and narrative-driven, combining quantitative precision with geopolitical context.
Swiss Re’s SONAR 2025 report further highlights that the insurance sector is entering a phase defined by structural change. Risks like supply chain instability, resource scarcity, and migration trends are not short-term disturbances but long-term structural forces. In response, actuaries are expanding their models to capture systemic vulnerabilities and resilience under deep uncertainty. Forward-looking actuarial work is becoming less about predicting the next shock and more about ensuring the robustness of institutions in a volatile world.
One of the most notable shifts is the growing emphasis on qualitative insight. As noted in a recent blog by the Institute and Faculty of Actuaries (IFoA), actuaries are engaging more directly with geopolitical intelligence, ethical considerations, and stakeholder perspectives. The aim is not just to quantify risk, but to understand its drivers and implications across multiple domains.
The profession is also increasingly involved in cross-functional teams, advising on enterprise-wide resilience strategies. This includes setting capital buffers, advising on sustainable investment strategies, and supporting scenario planning at board level. In parallel, communication skills are growing in importance. The ability to clearly explain uncertainty, model assumptions, and the consequences of tail events is essential in supporting informed decision-making at the executive level.
In today’s globally disrupted environment, actuaries are not merely technicians. They are interpreters of risk, facilitators of resilience, and architects of long-term thinking. Their evolving role is crucial to helping organisations navigate through complexity – not by eliminating uncertainty, but by preparing thoughtfully for it.
Sources
- Institute and Faculty of Actuaries (IFoA): Navigating Geopolitical Risks: How Actuaries Can Help Organisations Prepare for an Uncertain World
- OECD: Economic Outlook, Volume 2025 Issue 1
- Swiss Re Institute: SONAR 2025 – Structural risks, challenges and opportunities for the insurance industry