Corporations routinely insure for various risks, either through regular insurance companies, indirectly through re-insurance companies, or even through self-insurance. But what many organizations do not understand is the non-linear nature of risk – and the impact that has on their future sustainability. For example, the risk of an earthquake in St. Louis, MO in any one year is quite low, but the chance of a magnitude 8.0 earthquake in the next few centuries is almost a certainty. If this rare event actually happens tomorrow, losses will be catastrophic because the city is unprepared, and many firms will go under because they have not properly insured the risk.
The Performance Excellence Network, Twin Ports Minnesota Region, is pleased to announce our next breakfast discussion: “Evaluating Catastrophic Risks in the Corporate Environment” on Wednesday, January 28 at a the Medical Arts Building in downtown Duluth. The discussion will be facilitated by Kevin Wilson, CEO of Blue Water. The session is from 7:30 to 8:30 (networking 7:00 to 7:30). No cost for members; $20.00 for non-members.
Classic examples of the failure to understand risk include the huge losses associated with the tiger attack during a show at the Mirage Hotel in Las Vegas, NV in 2003; the tragic losses due to the long predicted Hurricane Katrina in 2005; the predictable but unexpected Japanese tsunami and nuclear disaster of 2011; and the highly predictable but still unexpected landslide at Oso, Washington in 2014. These types of disasters do occur, and understanding and managing them can prevent catastrophic outcomes for organizations.
