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PRACTICE
Fit for which future? Geopolitical events have radically changed what risk managers thought the future might bring. Delegates at the IRM’s risk leaders’ conference found out what it means for them BY ARTHUR PIPER
“C
reating a lot of risk assessments based on what’s happened in the past doesn’t work anymore,” Richard Pryce, chief executive officer for European operations at the insurer QBE told a packed IRM Risk Leaders Conference in November. He said Brexit in the UK and the election of Donald Trump as President-elect in the US had made such an approach redundant. “In scenario planning future high-impact events, risk managers need to understand that there is no such thing as an unlikely outcome. They should be working on the basis that a plethora of outcomes are possible,” he said. The ability for risk managers to adopt this perspective would be crucial over the next couple of years in the wake of the UK’s decision to leave the European Union, he said. Pryce doubted the Government’s ability to unwind the close ties with the Eurozone in the two years allotted to the process by Article 50 of the Lisbon Treaty. Scenario planning would be a crucial tool to predict the possible likely impacts on businesses of such factors as changes in currency movements, inflation rates and stock market values. “It should be clear to everyone that we are operating in a far more unpredictable environment than we were in May this year, but it’s our job to deal with the consequences of these changes on our businesses,” he added. For the insurance market, he predicted that there would be little change to the cost of insurance cover over the next
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It should be clear to everyone that we are operating in a far more unpredictable environment than we were in May this year, but it’s our job to deal with the consequences of these changes on our businesses
Enterprise Risk
