Checked Your Barometer Lately?
Feb 4, 2021

Back in 1958 when your faithful correspondent was learning to fly, the altimeters in small planes were mechanical. This meant that part of your pre-flight prep was getting a current barometer setting to calibrate the altimeter, otherwise the ground might sneak up on you. Hate it when that happens.

This reminiscence brings us to the new Allianz Risk Barometer, their annual survey of risk professionals worldwide concerning their top of mind risk-related concerns for the new year. Would you be surprised to hear that the present list is quite a bit different from last year's? Top of the 2021 list were business interruption, pandemic related risks, and cyber risks. Rounding out the top 10 threats on Allianz's Risk Barometer were market developments and volatility; legislative and regulatory changes; natural catastrophes; fire/explosions; macroeconomic developments; climate change; and political risks/violence.

One reason for reading other people's worry lists is to compare this world wide top ten with what you see in your organization. Does your list differ substantially? If so, why? Are your concerns driven more by near term issues unique to your industry or region? Or perhaps it's a matter of definitions. Several of the topics noted above, for example, contribute to the very large category of supply chain risks.

We've noted in several issues of this journal that the perfect, air-tight, just in time, no waste supply chain we all learned to love years ago can easily bite us in very tender places nowadays*. Whether you concur with Allianz's survey or not, what's important is that you have an up to date list that makes sense for your organization and that your worry list is shared with the people who can help you monitor and manage these concerns.

One revelation of dealing with COVID is how close truly existential risks can be as one industry after another has been backed into a corner. If you don't remember the scene below from Jurassic Park, we suggest you cut this out, frame it, and keep it on your desk. That's your number one risk. The name and face may change from year to year, but it's always there.

*See our "Say it isn't so" item below for an example - chess sets, of all things.


 
Source: Universal Pictures
 

 

Rethinking Conferences...

In our never ending pursuit of risk-based enlightenment, we have attended quite a few virtual conferences over the last few months. Something very important is happening right here, right now in the conference world and in our ability to inform and educate the folks working in all aspects of risk management. Here are some highlights:

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Getting better: Virtual conferences, like all things virtual nowadays, are getting better. We are all becoming more adept at using the technology - as producers and consumers of content - and a good many of us are becoming better at understanding how to address a camera instead of a room full of people. Making a really good presentation in a virtual format requires a different skill set as well as a more sophisticated use of visual materials and we see more and more presenters getting good at it. Early on, many presentations were created by the same firm-- Stumble, Mumble & Bore. The last several we attended were vastly improved.

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The price is right: Both the direct costs (travel) and indirect costs (time lost from normal work either at home or an office) are much lower. Travel costs vanish and the only time invested is the hours actually viewing the conference presentations. We have the impression from the online conferences we have attended that registration costs are lower as well.

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Flexibility: Most of the virtual conferences we have attended have the presentations posted online after the "real time" sessions. This allows consumers to schedule attendance when convenient or to see both of the two really interesting breakout sessions which were perversely scheduled for the same time slot.

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Training/in service education: One meta-issue plaguing essentially all aspects of risk wrangling is the retirement of our experienced adjusters, risk analysts, underwriters, and all those people who make the business run every day. Putting some form of internal structure around appropriate virtual conferences* can be an affordable way to nurture the expertise and skill sets of our new recruits. Indeed, Ametros Webinars just started a several month series of virtual presentations on "The Transitions: Passing the Torch" which addresses exactly this issue of talent retirement and talent recruitment and training. Yes, life does imitate art.

There is a good deal more about how to take best advantage of the wealth of new virtual conferences. Our short list is intended only to provoke some thinking if you have not already begun to explore the many offerings popping up in all our emails. By forcing the conference business to move beyond its expensive and time-consuming 1980s model COVID is reshaping the conference idea in a way that makes sense for the way we live now.

Oh yes - one other matter. Thus far, I have never lost my luggage going to a virtual conference.

*For example, have your people sign up for useful conferences and then require them to report back to their peers on what they learned to share the wealth.

 

Quick Take 1:
Who Watches the Watchers?

We see it all the time now. Something newsworthy occurs. It can be an accident, a street mugging, a political confrontation, any random event, but somewhere there was a camera that captured the event and we see it on the evening news or the media feed of our choice. Security cameras, dashcams ,and the like are everywhere. Best estimates are that the US has well over 70 million such cameras in action* and the average American is captured by security cameras 238 times every week.

A recent item in the San Antonio Star carries a reminder for risk oversight. The salacious details are not important, but the key issue is. A technician for a home security system company was installing cameras inside people's houses and then adding his own personal email to the system surveillance access permissions. Home alone, he would query any one of a few hundred systems he had access to and troll the video files for scenes that were supposed to be private. What if he had been your employee? What if the systems in question were restroom and locker room cameras or other venues where people - employees and/or customers-- have an expectation of privacy?

Every new technology solves some problems and creates new ones. We have noted in previous issues of the Journal how company security cameras have been used to facilitate break-ins and hijackings through lax controls. Here is one more potential bottomless risk pit to consider. If you make serious use of video surveillance systems, make certain that you know who is watching the watchers. Finding out that no one has this in hand could be very expensive.

Looks like your mother was right. Keep your clothes neat and clean, your hair combed, and smile - someone's taking your picture right... now.


 
Who's watching? Are you sure?
 

Quick Take 2:
Not All Risk Has a Dollar Sign
 

COVID grief is disenfranchised grief. Contemplate that for a moment. That comment comes from psychiatrist Joshua Morganstein, chair of the American Psychiatric Association committee which has developed advice for helping people cope with the personal impacts of COVID.

COVID grief has multiple dimensions. It is the grief we feel for the people we have lost, more every day. It is the grief we also feel for the life we have all lost, the life of casual contact, spontaneous meetings, the simple enjoyment of the company of people we know or would like to know, for our connections with so many communities of friends, family, and fellow citizens. Ask your friends in HR to get you access to "COVID-19 Grief Is Different: What Managers Should Know" on the Society of Human Resource Management website.

Don't console yourself with the idea that, well, that's HR's problem. It's not an issue for risk management. It has no bearing on our exposures, our policies, our risk analytics. Not really. Some of our most profound risks are not easily monetized. Our abilities as an organization to survive, rebound, even flourish can be sapped by the disenfranchised grief that saps our will, our energies, our creativity, our resilience.

Part of our job in risk management is helping our organization to find ways to cope, to offset, to assist the most vulnerable. Think of it as a form of loss engineering, as ERM of the highest sort.

As my old Swedish grandfather used to say, if you can keep your wits about you when everyone else is losing theirs, you may be tragically misinformed.

Say It Isn't So...

From a recent NPR report:


Who could've predicted chess sets might become as difficult to find as toilet paper during the early weeks of the pandemic? Not Gerrick Johnson. The toy analyst with BMO Capital Markets found himself stymied while searching for a particular Cardinal chess set a few weeks ago.

"It was sold out everywhere I went," he says.

Blame the new Netflix show, The Queen's Gambit. One more example of the crazy twists and turns - and unexpected risks - that we see nowadays in all our supply chains.

 

Words to Remember

A traditional take on managing risks:

When you see a rattlesnake poised to strike, strike first.

Ancient proverb of the Dine (Navajo) people

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