The Human Element in Risk Systems

By Bob Wolf, SOA Staff Fellow, Risk Management

BobWolf I recently participated in the 2011 Investment Symposium in New York and had the pleasure to enter into conversations about systemic risk that surprisingly, we were not having a few short years ago. As I spoke with some leading investment professionals and enterprise risk actuaries and experts, I realized that the human element of risk is finally becoming a mainstream topic of conversation. Discussions around lessons learned and how to in turn better prepare organizations and society for future events and scenarios are taking place across industries and professions. As actuaries, we are asking the right questions in relation to risk management. We’re focused on emerging risks. These exciting conversations, like those at this year’s Symposium, are leading to insights that were not conceivable even a short time ago. Most of the risks that manifest themselves within society relate to the human biases and decision-making of people, and not from some exogenous event.

Max Rudolph, fellow actuary and owner of Rudolph Financial Consulting, and I recorded a couple of brief videos to summarize some of the most interesting conversations and conclusions from the Symposium. One of the most lively sessions was on financial reform and posed the question, “Can the systemic risk that financial markets pose to society be regulated?”

The Human Element of Risk Management

2011 Investment Symposium Recap

After watching the videos and hearing some of the hypotheses put forth, we would love to hear your thoughts. What do you believe are most pertinent human elements involved in risk?

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