JRMS 2015 Emerging Risks Survey

Ninth Survey of Emerging Risks Risk management can be looked at in many ways—from how the volatility of an individual risk impacts profit distribution to how it threatens solvency. Emerging risks fall into the latter category. Risk managers seek out information about risks that, over a long time horizon, could have a great impact on an entity’s survival. By identifying these risks proactively, a firm can start thinking about how to react if they occur. This planned resiliency can make a big difference in combating and managing risk, as time may be short and key decision makers unavailable. It is impossible to anticipate every risk scenario, but setting up redundancies and recognizing where a firm is fragile can be the difference between survival and failure.

Some risks evolve in uncertain ways, have been forgotten as they lie dormant, or are new. Known-unknowns cover risks we understand exist but whose implications are unclear. The ultimate impact of asbestos, many years after it was declared a health hazard, is still not fully understood. Unknown-knowns are a bigger problem, where we think we understand a risk distribution but do not. An example might be when a disease enters the human realm and becomes endemic without any real solution to reduce the additional mortality. These types of risks—which act either in isolation or in combination with other risks—are termed emerging. They require more thought to manage and will not look the same to all risk managers.

This survey attempts to track the thoughts of risk managers about emerging risks across time. It is the Ninth Survey of Emerging Risks conducted by the Joint Risk Management Section, a collaboration of the Canadian Institute of Actuaries (CIA), Casualty Actuarial Society (CAS) and Society of Actuaries (SOA). Trends are as important as absolute responses, helping risk managers contemplate individual risks, combinations of risks and unintended consequences of actions The survey responses, especially the comments, give risk managers a way to network with peers and share the new ways they are thinking about risks. Each round of the survey enhances the knowledge of those who participate by helping them think more deeply about the topic.

Note that detailed survey results can be found in Appendix II. Notable in the respondent data is the much higher number of CAS credentialed risk managers who participated, making the results more robust.

Keywords: Emerging Risk, Enterprise Risk Management,