Risk Insider: Tony Boobier

Is Risk in Need of a Makeover?

By: | January 26, 2015

Tony Boobier is an experienced independent consultant focusing on insurance analytics. An international speaker, commentator and published author, he lies awake at night thinking about the convergence of insurance and technology. He can be reached at [email protected].

Topics: ERM | Risk Insider

According to some commentators, the 10 top things we should be frightened about in business in 2015 are, in no particular order:

• Cyber risk — that someone will put a ghost into the machine.

• Strategic risk — that the C-team get it badly wrong.

• Mis-selling — that we sell something we don’t have, or customers don’t really want or need.

• City failure — that London, New York, Paris or wherever, grind to a stumbling halt.

• Conduct risk — that we aren’t good boys and girls.

• Long duration scandals — that we discover skeletons in the cupboard.

• Illicit transactions — that we have been caught conducting business under the table.

• Model risk — that the real situation is worse than our wildest dreams.

• Physical security — that the locks on the windows aren’t strong enough.

• Social media — that we haven’t covered ourselves in glory, and now everybody knows about it.

These are my definitions, not their’s.

Each of these are bad enough in isolation, but the problems really stack up when you put a few of these together, especially in the same organisation. As we try and put controls around some or all of these things, I wonder if we shouldn’t put a little more emotion into the job?

Isn’t “fear” a much more compelling description, one which appeals to our basic instincts, and threatens our security

I’m intrigued by the use of the term “risk management,” which to me seems a calm expression for anticipating, and subsequently being in control of an event or combination of events that might happen.

But does it really adequately convey the seriousness of the problems? Let’s turn up the heat a little more. Why not call it “fear management?”

At least it gives a greater sense of proportion to the impact of getting it wrong on lives, jobs, finances, homes, and other very important things.

Isn’t “fear” a much more compelling description, one which appeals to our basic instincts, and threatens our security

“We have nothing to fear but fear itself,” said President Franklin Roosevelt.

Actually, I think he was probably wrong.

Read all of Tony Boobier’s Risk Insider articles.

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