In InsuranceERM, David Walker published, yesterday Insuring an uninsurable world – the pricing actuary’s Mission Impossible? “Actuarially, it is entirely possible – and often documented – that the technical premium reflecting pure risk without political intervention, mutualisation or capping varies by a factor of 30 or more, depending on exposure to flood or forest fire … Continue reading Insuring an uninsurable world – the pricing actuary’s Mission Impossible? →
Expert strategies for identifying and managing diverse business threats in a complex, global environment.
ARCHIVE, March 18, 2011 — Engineers used to talk about guarding against the “single point of failure” when designing critical systems like aircraft control systems or nuclear power plants. But rarely does one mistake or event cause a catastrophe. As we’ve seen in Japan, disaster is usually as function of [Keep reading]
Software doesn't scale through architecture and automation alone. New, more difficult problems appear that didn't exist before, causing new downstream consequences.
The possibility grid is a universal tool to draw attention to what is absent. It alerts you to think about rates of success rather than stories of successes.
The need for a sound decision-making approach in the face of uncertainty is greater now than ever before.
How does risky behavior spread? There are two theories: one involving social cues and the other involving trial-and-error. Covid-19 offered a chance to study this phenomenon and found evidence for both. In particular, the authors’ research documents a phenomenon of “risk creep,” where lucky near-misses (not getting Covid) encourage people to take riskier behavior in the future.
Richard Bookstaber was Salomon Brothers’ chief risk officer in 1997 when the firm was bought by Travelers and merged with Smith Barney, Travelers’ retail brokerage. He describes the resulting clash of cultures.
Plus! Pensions; Customer-Facing; Use Cases; Making a Market; Reflexive Energy Politics; Diff Jobs
The most important lessons from history are the takeaways that are so broad they can apply to other fields, other…
Though the industry is called venture capital, the goal of a VC isn’t to maximize every risk. Instead, we try to understand all the risks a business might face and weigh those risks with the reward - the exit. Here are the major risks that I typically review when a startup pitches. Market timing risk - Is now the right time for the business? It’s often hard to evaluate this risk, but nevertheless, it’s an important consideration.
Developed during World War II, CARVER is a tool for assessing and ranking threats and opportunities. It can be both offensive and defensive, meaning it can be used for identifying your competitors’ weaknesses and for internal auditing. CARVER can help risk management professional think through an asset’s criticality, accessibility, recoverability, vulnerability, effect, and recognizability. Since it draws on both qualitative and quantitative data, CARVER can be applied in almost any scenario that is analyzed and discussed in an organized, logical way. It can be highly useful if you need to, for example, defend a budget request or a strategic plan to company leadership. Because it helps you articulate an efficient story using numeric values, CARVER can be used to clarify mission objectives — whether on the battlefield or in the boardroom.
The risk to organic search performance from altering a website usually comes from changes to content, linking structures, or underlying technology. With careful planning and execution, however, you can mitigate the risk from those changes and increase the likelihood of better rankings. This is the 11th installment in my "SEO How-to" series
Inversion is a powerful mental model to improve your thinking because it helps you identify and remove obstacles to success. Most of us tend to think one way about a problem: forward. Inversion allows us to flip the problem around and think backward.
R&D leaders can boost productivity by using advanced analytics to create stronger, faster engineering teams.
Last night, Twitter curtailed Meerkat's access to its graph . I saw lots of discussion on Twitter (I'd say this was ironic but it's just expected) about why and whether Twitter should just compete on its own merits with its recent acquisition Periscope . Some have termed what happened to Meerkat
You’re probably not aware of it, but the price of your product includes a risk discount.
After months of sanctions that have made critical repair parts difficult to access, aircraft operators are running out of options.
Plus, with Revlon’s bankruptcy, Wall Street bankers get ready for a wave of distressed situations.
Fast, clear feedback is crucial to gauging probabilities; for lessons, consult weather forecasters and professional gamblers.
Standard risk management can’t cope with black swans. Enter: scenario analysis.
Metrics surround us. Whether you're building the next big thing and need to measure customer churn,...
By now we’ve all heard the news that none of us wanted to hear — a significant breakup occurred in space, and was intentionally performed…
From the docks of 12th-century Genoa to the gambling tables of today, risk is a story that we tell ourselves about the future
How to put a price on the limits of knowledge
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In space, every failure could equal disaster. On Earth, they were priceless gifts.
On making optimal decisions, when to expect the average outcome in life, and when not to.
It’s easy to write or talk about an issue without staking anything on its outcome. After all, that’s what casual forecasters do all the time. But having something in play — reputation or money or something else — can make sure that people remember their claims. This can keep us honest. There are obviously a … Continue reading "Three Wagers"
Risk management needs to be part of the daily lives of all employees up, down, and across an organization. Here’s how the Swiss electricity network achieves that.
You’re probably familiar with the concept of Choose Boring Technology. If you’re not, I’ll wait for you to read the excellent blog post by…
We asked three executives who’ve spent their careers on the cutting edge of the financial industry what they see coming in 5 to 10 years. Here are their answers.
The five steps below are professional risk management techniques to apply to your projects, proven to be effective. Step 1: Identify the risks
Bow-Tie is one of the simplest but most helpful risk management tools in the risk management arsenal. And it's highly visual.
Nautilus is a different kind of science magazine. Our stories take you into the depths of science and spotlight its ripples in our lives and cultures.
“It’s not rocket science!” people often say. Well, sometimes, projects can be so complex, making the right decision does feel akin to rocket science. Who better to turn to than one of the biggest space agencies in the world to learn how to manage risk? There are few organisations working on projects as complex as ... Read More
An illustrative guide to estimate the pure premium using Tweedie models in GLMs and Machine Learning
We recently collaborated with Riskfuel, a startup developing fast derivatives models based on AI, to measure the performance gained by running a Riskfuel-accelerated model on the Azure ND40rs_v2 Virtual Machine instance powered by NVIDIA GPUs against traditional CPU-driven methods.
The costs of natural disasters are becoming too much to bear – and it’s driving up premiums no matter where you live. The solution may be a type of insurance never seen before.
A collection of awesome projects, blog posts, books, and talks on quantifying risk - veeral-patel/awesome-risk-quantification
It’s common for companies to hang on for too long to projects or parts of the business that are underperforming. Two effective techniques can help executives make project investment decisions on when to hold on to an asset and when to let it go.
The key is flexibility, according to Trump's former National Security Advisor.
Robert Smith is the Founder, Chairman, and Chief Executive Officer of Vista Equity Partners. A March 2018 Forbes profile described Vista’s performance: “Since the firm’s inception in 2000, Vi…
