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Managing Risk’s
Butterfly Effect
- Chaos Theory
It is said that something as small
as the flutter of a butterfly’s
wing could cause a typhoon
halfway aroun...
…chaos brings opportunity
For those who are prepared…
How do you
decide which
risks are worth
embracing?
Quantitative & Qualitative
Quantitative Risk Assessment Protocol
a) Conduct a risk assessment and vulnerability study to determine the risk
factors.
...
Litigation Risk Assessments
• Case Status – A short description of the current status of the proceedings,
anticipated moti...
Hazard Identification
Dose-Response Analysis
Exposer Assessment
Risk Characterization
Risk from a business perspective…
…an element of effective
strategy and good
decision making
Chaos Theory
Game Theory
Military Risk
Analysis: OODA
Scenario Planning
Assessing the Strategic Risk
Simplicity Complexity
Certainty Uncertainty
Knowing Forecasting
Proactive Adaptive
Strategic
...
Take a
Chance
Take A
Pass
Delegate
Take
Your
Time
HIGH
LOW
LOW HIGH
Probability
Impact
Trigger Points
The Key To Success in the
New Normal…
•Nimbleosity
•Nimbo-licious
PQ&A Top 10
1. What is the REAL time frame?
2. What are the REAL numbers?
3. Can we verify the data?
4. What is the Ripple...
When values
are clear,
decisions are
easy.
Meridian CPCU Managing Risk's Butterfly Effect
Meridian CPCU Managing Risk's Butterfly Effect
Meridian CPCU Managing Risk's Butterfly Effect
Meridian CPCU Managing Risk's Butterfly Effect
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Meridian CPCU Managing Risk's Butterfly Effect

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Talk on risk assessment and decision making in business.

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Transcript of "Meridian CPCU Managing Risk's Butterfly Effect"

  1. 1. Managing Risk’s Butterfly Effect
  2. 2. - Chaos Theory It is said that something as small as the flutter of a butterfly’s wing could cause a typhoon halfway around the world.
  3. 3. …chaos brings opportunity For those who are prepared…
  4. 4. How do you decide which risks are worth embracing?
  5. 5. Quantitative & Qualitative
  6. 6. Quantitative Risk Assessment Protocol a) Conduct a risk assessment and vulnerability study to determine the risk factors. (b) Based on the top 5 risk factors - determine the value of assets under risk. (c) Determine the historical attitude of the company @ risk exposure. (d) Estimate the Annualized Rate of Occurrence (ARO) for each risk factor. (e) Determine the countermeasures required to overcome each risk factor. (f) Determine the Annualized Loss Expectancy (ALE) for each risk factor. (g) Conduct the safeguard cost/benefit analysis by calculating the difference between the ALE prior to implementing the countermeasure to the ALE after implementing the countermeasures . (h) Based on the above analysis, determine the return on investment using Internal Rate of Return (IRR).
  7. 7. Litigation Risk Assessments • Case Status – A short description of the current status of the proceedings, anticipated motions and discovery, and settlement discussions or their absence. This section also can address issues such as the existence of an arbitration agreement and insurance coverage. • ƒLegal Analysis – An assessment of any significant legal issues, including the benefits and risks of obtaining a binding judicial precedent. • ƒStrengths and Weaknesses – A succinct outline of the strengths and weaknesses of your factual and legal position, including such factors as the substance and impact of the evidence, the availability and quality of witnesses, the sympathy or not of the adversary, the friendliness or hostility of the tribunal, and the competence and experience of opposing counsel. • ƒBudget – The anticipated legal budget. • ƒPossible Results and Probabilities – An assessment of damages, including possible results, probabilities and discounted values, and anticipated litigation expenses. The case value assessment includes percentage estimates based on various potential outcomes. Although percentages may imply more precision than is justified, they convey information more clearly than imprecise adjectives frequently used in describing litigation risk.
  8. 8. Hazard Identification Dose-Response Analysis Exposer Assessment Risk Characterization
  9. 9. Risk from a business perspective…
  10. 10. …an element of effective strategy and good decision making
  11. 11. Chaos Theory Game Theory Military Risk Analysis: OODA Scenario Planning
  12. 12. Assessing the Strategic Risk Simplicity Complexity Certainty Uncertainty Knowing Forecasting Proactive Adaptive Strategic Planning Scenario Planning
  13. 13. Take a Chance Take A Pass Delegate Take Your Time HIGH LOW LOW HIGH Probability Impact
  14. 14. Trigger Points
  15. 15. The Key To Success in the New Normal… •Nimbleosity •Nimbo-licious
  16. 16. PQ&A Top 10 1. What is the REAL time frame? 2. What are the REAL numbers? 3. Can we verify the data? 4. What is the Ripple Effect? 5. Who REALLY needs to be involved? 6. Who can/will make this decision? 7. Are we looking for unanimous or consensus? 8. Can this decision be overturned? 9. Do we have the resources and authority to implement the decision? 10.What is our plan for reviewing the outcome?
  17. 17. When values are clear, decisions are easy.
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