It’s a risky world and according to Willis Chairman and CEO Joe Plumeri, it’s only getting worse. From volcanoes to oil rig fires to high-profile SEC investigations (and that’s only in the last few weeks), disasters that were once unheard of are becoming almost commonplace and outliers seem to be the rule rather than the exception. “It’s almost like in a given week there are more black swans than white ones,” he said today in an entertaining and informative talk at RIMS 2010.
Plumeri doesn’t think that the increase in disasters is a coincidence–this is just how the world is now. And risk managers need to adjust their thinking to take this new reality under consideration. “The world has changed,” he said. You have to do what is necessary to prepare and protect your organization. If there’s a gap, you have to change it.”
To that end, risk managers need to think about what the biggest risks to their businesses actually are. Plumeri’s list kind of reads like the perfect editorial calendar for a risk management magazine, like, say, mine.
10. Reputation
9. Piracy
8. Cybersecurity
7. Globalization
6. Cost and availability of credit
5. Regulation and compliance
4. Market cap risk
3. Pandemics
2. Terrorism
1. Climate change
The interesting thing, Plumeri said, was that many of these risks are things that would never have occurred to risk managers years ago. “Growing up, the only terrorist I knew was my brother,” he joked. But, as he pointed out, these are the types of things that can have the biggest impact and risk managers need to be ready.