When uncertainty becomes a competitive advantage rather than a compliance exercise Risk management delivers hard cash savings when it quantifies uncertainty in operational and financial decisions. Organizations that integrate probabilistic thinking into credit management, operations, capital allocation, and insurance purchasing consistently reduce losses, free up trapped capital, and outperform competitors still relying on ERM nonsense.… Continue reading How Risk Management Creates Immediate Economic Value
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Risk management is broken: why savvy professionals move beyond ERM
What if everything your organization calls “risk management” is actually making you poorer and more vulnerable? While companies worldwide pour billions into risk registers, ERM frameworks, and risk committees, they’re missing the most profound opportunity in modern business: transforming risk management from a cost center into a profit engine that could slash expenses and generate… Continue reading Risk management is broken: why savvy professionals move beyond ERM
The $221 billion scam: why your company is both overcharged and underinsured
Large corporations face a paradoxical crisis: 90% of buildings are underinsured while simultaneously overpaying for coverage, according to Kroll’s 2021 appraisal study. This represents a $221 billion annual global property protection gap (Swiss Re) occurring alongside systematic overpayment driven by pricing inefficiencies, with leading insurers achieving 47% loss ratios versus 73% for laggards—a 26-percentage point… Continue reading The $221 billion scam: why your company is both overcharged and underinsured
Why I don’t trust ChatGPT with risk management
Two years ago, I realized something that made me uncomfortable: every time I tested a public AI tool on risk management questions, it gave me terrible advice. Not just unhelpful. Actively bad. I’d ask ChatGPT about risk matrices, and it would enthusiastically explain their benefits. Claude would walk me through implementing enterprise risk management frameworks.… Continue reading Why I don’t trust ChatGPT with risk management
The guy who created risk management says we screwed up
Grant Purdy helped write the book on risk management – literally. He co-authored ISO 31000, the global standard everyone follows. After 50 years in the field, he’s saying something uncomfortable: we got it wrong. Here’s what he means. Walk into most companies and you’ll find risk registers nobody reads, heat maps that annoy everyone, and… Continue reading The guy who created risk management says we screwed up
Stop avoiding the risk quantification elephant in the room
In a profession dedicated to identifying and managing uncertainty, there exists a puzzling contradiction: many managers actively avoid quantifying the very risks they’re tasked with. You probably know risk managers like that, we all do. While quantitative risk analysis forms the foundation of effective decision-making under uncertainty (see any textbook on decision science), it remains… Continue reading Stop avoiding the risk quantification elephant in the room
How risk management turned into a meaningless ritual
In 1946, mathematicians at Los Alamos developed Monte Carlo simulation to model nuclear reactions under uncertainty. By the 1990s, sophisticated mathematical approaches to risk helped win Nobel Prizes and generate billions in financial markets. In 1998, Long-Term Capital Management (LTCM) showed us the limitations of risk models. Today? Many organizations have reduced risk management to… Continue reading How risk management turned into a meaningless ritual
Beyond KRIs: Making Performance Metrics Risk-Aware
Risk managers developed a troubling tendency to create parallel systems for everything. One prime example is the separation between Key Performance Indicators (KPIs) and Key Risk Indicators (KRIs). Everyone is using KRIs without even realising how RM1 they are. This artificial division doesn’t reflect business reality and creates unnecessary complexity while reducing effectiveness. The problem… Continue reading Beyond KRIs: Making Performance Metrics Risk-Aware
Can you build an AI model that identifies risks better and faster than humans? I did.
Imagine if you needed to perform a risk assessment for a contract, project or the whole company and you had the luxury to sit down and chat with CFO about financial risks for hours. You could ask questions about everything the finance team does, the sources of funding, credit, liquidity, FX, insurance, taxes, financial controlling,… Continue reading Can you build an AI model that identifies risks better and faster than humans? I did.
Whether you want to or not, AI will shape the future of risk management
When I moved from a multibillion dollar global fertiliser company to a ramping up rare earth mining company in Brazil, my operational risk team went from 9 to 3 people. I thought we would have to scale back on the risk management projects and the types of quant risk models our team built. But then,… Continue reading Whether you want to or not, AI will shape the future of risk management
