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Today's risks can arise in fast and furious fashion

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Risk managers are facing a range of potential problems, including political uncertainty, market volatility and technological challenges such as cyber risk, a panel of experts agreed.

Lawrence Wilkinson, senior director at S&P Global Ratings, who moderated the discussion Wednesday during the at the S&P Insurance Conference in New York, said that while emerging risk has always been important to the insurance industry, the 2008 financial crisis “really redoubled the industry's efforts in this important area.”

Cyber, regulations, and terrorism, Mr. Wilkinson said are just a few “in a long, diverse list, of potential risk forces that companies need to identify, assess, and execute timely … decisions.”

Three risk management professionals shared their views on several topics during the session on managing emerging risks.

“We look to set up a framework across our company,” said Elizabeth Ward, chief enterprise risk officer and chief actuary at Massachusetts Mutual Life Insurance Co. “We are not only looking internally, bottom up, we are also looking from the outside in.”

Robert Rupp, executive vice president and chief risk officer at Hartford Financial Services Group Inc., said cyber risk, while not a new threat, can still be considered an emerging risk because it's “fast moving and creative.”

“We forced ourselves into a discipline,” Mr. Rupp said. “It's going to happen sooner or later, and how bad will it be? One thing I've been focusing our attention on in the last year or so is velocity. How fast will it unfold? The credit crisis was a very slow-moving event. You had time to react. But then there are things that jump up at you. Bernie Madoff, for example. You wake up one morning, and there it is in the news. You didn't see that coming, and it's certainly moving fast.”

Mr. Rupp said the 2013 breach of discount retailer Target Corp., where 70 million customers had their information hacked, “was a very quick wakeup call.”

Jacob Rosengarten, chief enterprise officer with XL Group P.L.C. discussed the potential risks involved withthe upcoming June 23 referendum where Britain will decide whetherto leave the European Union. News reports said that British support for leaving the E.U. has recently surged.

“What if laws do get rewritten?” Mr. Rosengarten asked. “What does it mean for Scotland? Scotland has made it clear, they want to be part of the E.U. Does it become a rump nation? What does it mean for NATO? Are we creating more geopolitical instability?”

Polls have shown that a majority of voters support leaving the E.U., according to news accounts. Mr. Rosengarten said that even if Britain does remain in the E.U., the issue has been divisive.

“It's just not going away,” he said.

In discussing best practices for risk managers, Mr. Rupp referred to his previous experience working on a trading floor.

“Every day I got a score card that told me if I made money or if lost money,” he said. “And there was no spinning about it. It was 'here's the number, you did good or you did bad, and here's why.' I really, really liked the clarity and simplicity of that discipline.”