COVID-19 IS NO BLACK SWAN: FINDING A BETTER WAY TO DEAL WITH UNCERTAINTY
by Hélène Galy Director of the Willis Research Network Rather than focusing on hindsight and a fatalistic approach to risk, pursuing a more forward-looking, proactive strategy will improve resilience when, not if, the next crisis strikes. In the midst of the Covid-19 crisis, many claimed to have spotted a “black swan”. But was it really the right animal metaphor to use in this case? Aesop often used animal characters in his fables, fictitious stories picturing a truths about human folly. Our fascination with animals continued with the medieval bestiaries, and today analysts continue to describe market behaviour using animal metaphors: bull, bear markets or the lesser known bunny market. In one of Aesop’s fables, the boy who cried wolf had a dreadful fate: a brutal lesson on risk communication. The boy lost his credibility by creating false alarms, whether intentionally or not, and so wasn’t listened to when the real event happened. In the case of the Covid-19 pandemic, we actually had evidence that the wolf was already in the herd, if
only the shepherd had taken a closer look. Warnings from a range of credible institutions should have been listened to. Without going through an extensive review of predictions and threat analysis reports, three examples stand out, showing that the crisis should not have come as a complete surprise. Epidemiologists had warned in the 2019 Global Preparedness Monitoring Board report the chances of a global pandemic were growing and the world was unprepared for a fast-moving, virulent respiratory pathogen pandemic. The latest UK National Risk register identified pandemic influenza as a top high impact, high likelihood event. Then, in October 2019, the US-based Centre for Health Security organised an eerily prophetic pandemic simulation involving a coronavirus similar to COVID-19. With these pre-existing expert scenarios, can we still call COVID-19 a black swan and why were those warnings missed?
