DIRECTOR OF STRATEGIC AND
ENTERPRISE RISK PRACTICE
RISK AND INSURANCE MANAGEMENT SOCIETY (RIMS)
If you define risk as “an uncertain fu- ture outcome that can either improve or worsen our position,” the world may
be considered riskier. There is much more
uncertainty given the complexity and speed
of change in today’s world than was the case
The key is to understand that
risk isn’t only to be avoided
or mitigated. Risks are to be
understood in light of an
for their relevance, im-
portance and certainty so
that the known risks that
can “improve our posi-
tion” can be exploited,
and those that can “worsen our position” can
be managed. Those risks that are most uncer-
tain, whether known or unknown, become
the basis for scenario planning, so that the
organization can consider them in light of its
overall strategy, as well as its future resilience
and sustainability planning.
Our clients’ global challenges around risk
have never been greater. Everywhere we look,
the magnitude, complexity and scope of risk
are increasing. Are clients telling us, “We
no longer need you. We have this risk thing
figured out...”? No. All of the traditional risks
such as property, casualty and D&O remain
and are growing, as are evolving risks such
as global warming, sustainability, pandemic,
identity theft and cyber risk.
While many will agree that the global
recession may have bottomed out, economic
conditions continue to challenge businesses
around the world. Our clients are facing a
tough environment when it comes to regula-
tion and legislation, and clients everywhere
are seeing an uptick in competitive pressures.
PRESIDENT | ASPEN U.S. INSURANCE
When it comes to issues like workplace management, automobile safety and construction design, I do believe that we in business and in life do learn some lessons—and do make the world a safer place.
However, if you look at real risk in a more holistic
way, you have to conclude that it is a much more severe world—and not only is severity worse in risk, but
the correlation between risks is greater. We saw that
with the Icelandic volcano, when goods and parts
from Europe could not be flown to the United States.
Assembly-line plants ground to a halt.
The global shift to just-in-time production is
wonderful when you’re trying to run a corporation
at a very lean balance sheet. But it has a cost. It has a
I subscribe to a theory that for every risk that actually gets safer, a new one is added. You just have to
look at newspaper articles to find concerns over nanotechnology and some of the
hazards that this technology may be presenting to health around the world. And
cell-phone radiation. The point is we can easily identify some things that clearly
present a safer world, but it wouldn’t be hard to find a few things that actually replace those every day—new risks and new concerns that ultimately will affect both
individual and corporate balance sheets.
Vitale is the former CEO, Global Corporate, Zurich Financial Services; and former CEO
Willis North America.