A workshop on the “Global Landscape of Risks” was held on 10 September 2013 in London as part of a collaboration between the University of Cambridge Centre for Risk Studies, and Munich Re’s Integrated Risk Management. Participants from the insurance industry included senior risk management practitioners from a number of different insurance companies, together with brokers, academics, modellers, and consultants.
The theme of the workshop was on how to achieve a systematic and comprehensive view of all major risks that insurers are facing. A better understanding of the global landscape of risks, its components and interactions represents a key challenge for the industry.
Examples of different approaches were presented and discussed, including a top-down, historical precedent approach taken by the Cambridge Centre for Risk Studies to create a taxonomy of threats, and Munich Re’s “Complex accumulation” project which proposes a specific method for a structured collection of critical events and potential triggers and consequences.
The workshop provided an opportunity for working groups to discuss:
- the benefits and challenges of standardisation
- alternative approaches to identifying hidden scenarios, and
- benefits and limitations of collaboration across the insurance industry
The conclusions of the working groups included a recommendation that it would be helpful to standardise terminology and concepts, and that there could be benefits in a common framework for risk identification. There were strong perceived benefits in collaborating on risk identification and prioritisation. Data standards were another area of coordination benefits, with companies interested in agreeing ways of structuring information that might be exchanged or shared between interested parties, such as scenarios or exposure data schemas.
We received very positive feedback from the attendees of the meeting, with participants saying that they found the topics relevant, useful, and a good learning opportunity. There was strong support for continuing the dialogue and positive interest in attending future meetings on this topic.
As a result of this positive feedback, we propose to hold further insurance industry meetings, expanded to a wider audience if there is sufficient additional interest, to focus on collaboration in improving risk identification and categorisation, data structures, information interchange standards, and tools for evaluating and responding to emerging risks.