Crossing Thin Ice

Think you understand corporate risk? Listen in as we explore the ins and outs of SEC disclosures.  Are the risks that matter the most being buried?  What do you need to know to properly understand the Risk Factors section of the SEC filings.  

Explore how AI can enhance creative problem-solving within risk management. Dave and Max discuss the importance of adapting to emerging risks and the role AI can play in this process. From generating innovative ideas to providing instant feedback and keeping track of complex iterative processes, AI serves as a powerful partner for risk professionals. Tune in to discover practical strategies for leveraging AI to think creatively about risk management, improve decision-making, and stay ahead in an unpredictable world.

Insurance only works if we can all keep up with the rapid changes being brought on by climate change. In this  podcast,  Max Rudolph explores the challenges insurers face with wildfires, hurricanes, and the struggle to set fair premiums. They discuss the need for community resilience, regulatory shifts, and innovative predictive modeling. Join them to discover how homeowners can protect themselves in an unpredictable market and why sustainable practices are essential for the future of insurance.

Anyone who has worked in Risk Management has encountered individuals who, for one reason or another, do not believe that ERM is beneficial to a company.  In this podcast, Max and Dave examine 10 common Anti-ERM Beliefs and suggest ways to address them.  

Discover four scenarios that could reshape our world and your business. Max and Dave are always talking about how important it is to do stress tests.  Here are some examples of today's risks to get you started.  Each of these scenarios is built off a plausible extrapolation of recent trends.  This podcast offers a deep dive into the dynamics that could have a major impact your organization. Tune in to prepare for the challenges ahead and turn potential threats into opportunities for growth.

Are we ready for the next wave of challenges? As the world evolves, so do the risks that come with it. From climate change to geopolitical tensions and the rapid rise of AI, the landscape is shifting in ways we may not fully comprehend. These emerging threats can disrupt businesses, economies, and even our daily lives. It's crucial to stay informed and proactive in our risk management strategies. Join us as we delve into the complexities of these risks and explore the measures we can take to navigate an uncertain future. Together, we can better prepare for what lies ahead.

Climate change isn't just about heat. It's also changing the chemistry of our oceans, with serious consequences for marine life and food security. In this episode of Crossing Thin Ice, we examine how ocean acidification could accelerate ecosystem collapse. By Max Rudolph

Are you using RBC for your company's risk capital calculations? In this episode of Crossing Thin Ice, Dave Ingram and Max Rudolph dive into the power of Own Factor Risk Formulas—customized risk metrics that can give insurers a clearer, faster, and more accurate picture of their capital needs that is easy to explain to executives and boards. From historical stress testing to AI-enhanced risk management, we explore how companies can move beyond regulatory formulas to build a model that truly fits their risk profile.

When building scenarios - It certainly does!  Think about how the 2008 financial crisis reshaped economic forecasts. Those who clung to pre-crisis assumptions faced severe consequences. Acknowledging a new starting point means more resilient strategies. By Max Rudolph

Ever wonder why the ‘best practices' in ERM often fail? Here's the secret.  ERM that does not fit the company will be rejected.  It will not transform the company.  Imagine an ERM program that your whole company supports.  That is what you need.  By Dave Ingram

The future belongs to those who learn to adapt. In this, the 48th episode of Crossing Thin Ice, Dave Ingram and Max Rudolph dive into the importance of adaptability in modern business. Explore how the new Adaptor role will help companies to anticipate challenges, leverage opportunities, and embed resilience into every decision.

From China's aging population and economic slowdown to India's tech-fueled growth, from the decline of globalization to the rise of AI and climate disruptions, we explore how emerging risks intertwine to drive the future of our risks in 2025 and beyond. Whether you're a board member, risk manager, or just live on this planet, join us as we navigate these seismic shifts and uncover the strategies needed to stay ahead.

In this episode of Crossing Thin Ice, we revisit the crucial topic of zoonotic spillover diseases and their evolving impact. From the ongoing challenges posed by COVID-19 to the growing concern about bird flu spreading through mammals, including dairy herds, the discussion highlights what we've learned—and what we still need to monitor. Special focus is given to wastewater surveillance as a tool for early virus detection and the role actuaries can play in pandemic preparedness. Tune in to explore these pressing issues and learn how demographic shifts, evolving viruses, and actuarial foresight can help us better prepare for future health crises.

Discover how LLMs are transforming the way risk professionals tackle complex problems, enhancing decision-making much like spreadsheets revolutionized calculations. Listen as we dive into the practical applications of LLMs for Chief Risk Officers, from environmental monitoring to scenario generation, breaking down how these tools can help manage uncertainty, identify weak spots, and even reveal what's missing in risk assessments. By Dave Ingram

There are massive challenges for setting modeling assumptions in an era of increasing uncertainty. With insights into the impact of climate change, economic volatility, and emerging risks on actuarial models, this podcast explores the concept of resilience in modeling by adapting assumptions to manage volatility from unexpected events. Max Rudolph provides practical advice on addressing assumption uncertainty, integrating risk margins, and refining risk management strategies across assets and liabilities.

A risk-focused mindset ensures better informed, resilient decisions. This mindset leads to a Risk Management Decision-Making process that we describe in this podcast and explain how it differs from other decision-making approaches such as heuristics, satisficing, and cost-benefit analysis.  We feature the five essential components—risk awareness, diversification, risk appetite and tolerance, risk-reward management, and competitive advantage—and discuss how these elements transform decision making.

Once more, we dive into a critical discussion on regime change, the scenarios that could drive it, and for the first time talk about what might follow.  This episode of Crossing Thin Ice features insights from experts Max Rudolph, David Ingram, Raghu Ramachandran, and Jim Evans. Our conversation covers key drivers like climate change, debt levels, demographics, and technology, and explores tipping points that could dramatically reshape the risk landscape. Join us as we analyze potential scenarios and the vital role that risk management plays in navigating these transformations for insurers and beyond​.  Now available – documentation of how the scenarios are developed, summaries of the seven scenarios presented on the podcast and a look at our full set of 81 scenarios. https://riskviews3.wordpress.com/before-and-after-regime-change/

AI is being used to improve investment decision-making and risk management. Dave and Max discuss how these models can be retrained with specialized knowledge to enhance long-term strategies while addressing key risks like data bias and overfitting with guest Kailan Shang. Join us as we explore the growing role of AI in shaping the future of investment management. Shang has written a research paper  https://tinyurl.com/25v27q4p that emphasizes the importance of balancing AI's analytical power with human judgment and ethical considerations. Listeners will discover how AI is shaping the future of investing and the key risks from AI.

As winters grow milder and the global climate shifts, vector-borne diseases like Lyme and Zika are spreading to new regions. Join us as we delve into the science behind this expansion and explore the public health strategies essential for staying ahead of these threats. Another emerging risk podcast by Max Rudolph. 

Build your strategic foresight with our latest Crossing Thin Ice episode "Scenario Planning in 10 Steps." Learn how you can use scenario planning to road test your strategies to ensure your organization is prepared for future challenges. Whether you're a seasoned risk manager or new to scenario planning, this episode offers valuable insights to enhance your strategic planning process and fortify your risk management framework.

Is there a Place for Zero Cash Flow Assets? Whether a product of today's added complexity or a result of the recent reach for yield when rates are low, more assets are being held by insurance companies with irregular or deferred cash flows. Some find this a natural progression, while others never find it appropriate. The answer is somewhere in the middle. It depends, but often can add value when done in moderation. This podcast will walk us through examples that differentiate specific products between times of stability and stress. By Max Rudolph

We are all overconfident. Sometimes Overconfidence is what is needed to get out of bed in the morning.  In an insurance company it is often the chief risk officer's duty to look out for overconfidence.  In an unusual twist, this podcast addresses overconfidence of chief risk officers and what they can do about it. By Dave Ingram

Explore with us how AI is poised to transform the actuarial landscape. We interview Dan Kim, an actuary pioneering AI innovation to streamline research and enhance efficiency. He delves into the challenges of AI hallucinations and bias, highlighting the need for transparency and accuracy. This episode uncovers the exciting potential and critical considerations of integrating AI into actuarial work. First in a Series.

You must walk the walk and not just talk the talk. Strong Risk Management culture means that words and actions are also consistent with beliefs. By Dave Ingram. We would like to know what you think about a set of 30 Risk Culture Beliefs that we have observed.  Please take our totally anonymous survey about RISK BELIEFS.   We have been sharing discussions of the 30 Risk Beliefs - Read about them HERE

The leading risk in the 2024 survey is Cybercrime. From phishing scams to ransomware attacks, cybercriminals are constantly evolving, posing new threats to individuals, businesses, and governments alike. Consistently ranked #1 or #2 in the annual Dangerous Risks survey, learn why we think that Cybercrime is here to stay. By Dave Ingram  And here is the link to the Fear vs. Danger podcast where we go into detail about what it takes to make something highly Feared even when it is only moderately Dangerous.  https://crossingthinice.podbean.com/e/fear-vs-danger/ 

Feedback loops are increasingly seen as important in climate projections. Melting permafrost is expected to accelerate warming of the planet and release pathogens unknown to us today. By Max Rudolph.

Four scenario examples leading to Regime Change from Neil Howe, Ray Dalio, Peter Zeihan and the IPCC show us how widely the disruptions can differ while consistently ending up with a big regime change in our near-term future. Part 2 of a four-part series. By Dave Ingram and Max Rudolph

When rates recently spiked it surprised many with direct and indirect implications. The market value of bonds decreased, and the price of replacement parts for autos increased. There are three ways that insurers can be affected by higher rates. Looking at past events help to prepare for similar tail events in the future. By Max Rudolph.

The 2024 survey sees respondents react to recent increases in specific risks as technology evolves and the environment moves away from the pandemic. The top 4 risks are the same as those seen in 2019. By Dave Ingram and Max Rudolph.

New asset classes like junk bonds and subprime mortgages initially promised high returns without too much risk. Many investors were surprised to find that the risk premium was insufficient to provide for actual losses when they came. Modelers need to adjust for incomplete investment cycles that include only the positive part (e.g., high spreads) but not the defaults and liquidity crises typical at the end of a cycle. By Max Rudolph

Has any of your ERM program has been written down? Or is it at risk of being lost when a key player leaves the insurer?  The Risk Management Framework document provides the RiskMaster Cheat Codes for understanding the overall ERM system and for specific topics like stress testing and risk reporting to allow a new risk team to start from a solid base should that be needed. It also can act as a cheat sheet for the Board to be able to participate in ERM discussions even though they do not live in the system. By Dave Ingram.

Climate change and population growth have stressed fresh water sources, leaving agriculture and coastal residents with opposing issues. While aquifers and rivers struggle, extreme weather and sea level rise provide an overabundance of water. Insurers increasingly are dealing with these extreme weather events that highlight the presence of too much water (hurricanes, inland flooding) or too little water (drought, fire).  Today Max covers some existing issues while others will be emerging at a later time. By Max Rudolph

Resilience can be described as bending without breaking. There are four aspects of ERM that all need to be fully adopted to achieve this important result. By Dave Ingram.

It is commonly assumed that higher returns require higher risk to be accepted. Fear and greed may outperform over the short term but often the last investor in does poorly. Long periods of stimulus provide warning that economic cycles come to an end eventually. By Max Rudolph.

Radical changes in our Physical, Political, Economic and Social systems have been and will continue to buffet humanity. Every so often the combined result is a major change of regime in which new patterns for each of these systems develops and persists for some time creating a new normal.  We make the case that this is coming in our world. By Max Rudolph and Dave Ingram

It was tempting, when interest rates were so low, to borrow just because you could. But that may not be best for an organization from a risk/reward perspective.  Leverage can have a major impact on the risk profile that is not usually considered. Leverage is actually the flip side of risk management.  By Dave Ingram

No one is arguing anymore that the planet is not getting hotter, but what are the limits to temperature rise for humans survival? The ramifications for those who live in poverty in tropical zones is that they will need to move because of the heat. The alternatives are unacceptable. The world needs a plan to deal with massive climate migration. By Max Rudolph.

Stakeholder perception about the appropriate level of risk and the corresponding capital level varies. Some insurers focus on optimizing income and disbursements, while others find their goals aligned by holding redundant capital. Here we discuss several broad choices for the level of capital and the pros and cons of each based upon common business objectives. By Dave Ingram.

Historically, scenarios have focused on one assumption at a time but that is not realistic in today's quickly evolving world. Risk interactions are very important considerations and impact scenario assumptions dynamically. Three narrative scenarios that interact between financial and non-financial risks are discussed. By Max Rudolph.

Enterprise Risk Management is practiced in different ways by insurers. Some focus on the basics while others consider ERM as a strategic strength. In a recent survey, ARM asked what is most important to them about ERM.

Prior to 2019, Pandemic was the most studied emerging risk. And now that one has happened, it is time to study our reactions to COVID. In this podcast, we look at the reactions that people typically have to near death experiences and find that they are similar to the reactions that companies are having to COVID. Several very different reactions have been observed, but only one has a lasting favorable impact on the risk management program. By Dave Ingram 

Scenario based planning is good for forming company strategy and it can also be good for planning risk management. There are a number of ways that the future might play out for risk management and the likelihood of each of the six possibilities mentioned here has probably changed significantly because of our experiences over the past two years. Which future will you be prepared for and which would have been a total surprise if you hadn't listened to this podcast? By Dave Ingram

A volcano erupts somewhere, on average, every week. Eruptions large enough to impact the global environment happen much less frequently, but they have happened. The “Year without a Summer” in 1815 affected crops and immigration, and similar events will happen again. These Super Volcanoes tend to have numerous knock-on effects. By Max Rudolph

Concentration is added by doubling down on things you do well. This two-part story considers strategic drivers that add to concentration and tactical methods to mitigate these risks. By Dave Ingram and Max Rudolph.

When a catastrophic event hasn't happened since 1700 there is not much historical data to aid those who live there or insure residents. Here are some of the basic concerns. By Max Rudolph

There is a story about ERM that most insurers can tell. A story with four chapters: ERM Framework, Individual Risks, Aggregate Risk & Capital and the ERM Journey. Usually there isn't enough time to tell the the ratings analyst all four chapters, so you have to choose. By Dave Ingram

Tiny pieces of plastic are found in the ocean, soils and the human body. This can't be good. Scientists are still learning about the implications of microplastics, but it's clear that better recycling and reduced use of plastic bottles, fishing nets, micro beads and nurdles are a start. By Max Rudolph

Stress tests come in a wide variety of levels of adversity. This podcast suggests that we all should focus on just three: normal volatility, realistic disasters and worst case scenarios. Aligning the appropriate stress test to the audience is very important when managing risk for an insurer. Management, Boards and Regulators will each find something to like with these three levels of stress. By Dave Ingram

Emerging risks play a key role in risk analysis. One such emerging risk, Solar Storms, is much more than just pretty northern lights. An impactful solar storm happened as recently as 1859. Then, some problems with telegraph wires were reported, just imagine how much more we depend upon electronics now than we did in 1859. That is exactly what we do in this podcast.

A deep dive into the risk selected as the Most Dangerous of 2023.  We compare recent inflation spikes against past events, look at the drivers of the current bout of inflation, the impact on the insurance industry along with the most common responses.  In addition, we also invert the question and consider what would cause future inflation to be very low.  By Dave Ingram and Max Rudolph

Fear or Danger is a false choice. But using rational thought to balance fear and danger, and find an appropriate response, is very difficult. This repeatable process for thinking through how to react can improve your likelihood of success. Risk Intelligence: tinyurl.com/2dcywkx4