Category Enterprise Risk Management


The Case of the Hidden Hazards

William H. Panning – Here’s how two analysts uncovered conceptual risks – flaws in a firm’s assumptions and inferences about risk – that elude detection but may be as consequential as potential losses from external events. “We have to get a better understanding of what they are doing and whether it’s working correctly,” said my […]


The Lingering Effects of a Financial Crisis

George Zanjani – Green shoots. When I’ve talked to brokers and agents in recent years, I’ve often heard about “green shoots.” That’s gone on for several years now. When I dig deeper, I usually get mixed stories: The recovery is there, but it’s uneven. Sluggish insurance market recoveries are common in the aftermath of financial […]


Predictive Analytics: Chase Results, Not Unicorns

The secret to effective analytics is to apply it as a process, not a project. That essential strategic nuance gives hope to industry laggards while making the leaders look over their shoulders. Simply put, anyone can adopt a well-understood process, assuming executive commitment, strong communication, and diligent change management. However, if you believe analytics is a project that can make everything better, you’ll wind up chasing unicorns.


Disappearing Risk

2012 saw the ninth year of softening property casualty pricing measured by net written premium as a proportion of US GDP. In 2010 the proportion moved below 3% for the first time since 1974, and it stayed below 3% in 2011 and 2012. In 2003, the peak of the last hard market, property casualty insurance premium represented 3.6% of the total economy; by 2012 the proportion had decreased to 2.9%, a reduction of 0.7 percentage points of the entire economy – a massive movement for the industry.


Predicting Bionic Growth

Back in the early ‘70s, the fictional application of a technology called bionics created a pop culture icon in the form of The Six Million Dollar Man. The main character in this TV program went from near death to “better than he was before. Better. Stronger. Faster.” The technology that made him remarkable extended his sight, increased his reach, and provided more lift than any other human being ever. But here’s the point: If each of three people had only one bionic advantage, the story would have been far less effective than one character possessing all three capabilities simultaneously. Like The Six Million Dollar Man, some carriers today have implemented many operational and technology improvements over the years and now have iconic brands built around vigorous performance in growth and profitability.


Why Moneyball Matters

William H. Panning – This terrific story also has crucial implications for business executives, especially in insurance Billy Beane, general manager of the Oakland A’s, had a problem: recruiting a pennant-winning team despite having one of the smallest payrolls in the major leagues. How he solved that problem is expertly told in the movie Moneyball […]

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