Risk Matters

Risk events often deemed "unprecedented" are typically extreme iterations of past occurrences, argues Clifford Rossi, Professor of the Practice and Director of the Smith Enterprise Risk Consortium. Comparing these to “Killer Bees,” he emphasizes proactive risk management, urging organizations to anticipate and mitigate low-probability, high-severity scenarios with robust strategies and resources.

Poor risk management practices eventually come back to haunt those organizations that fail to take a broad and proactive view at managing risk.

Risk decisions often falter due to cognitive biases, underdeveloped decision-making processes, and overreliance on models. Clifford Rossi argues that robust frameworks and balanced decision structures are essential to navigate uncertainty effectively and mitigate poor risk outcomes.

Clifford Rossi argues that the homeowners insurance market is unraveling due to rising natural disaster risks. He proposes a government-sponsored entity to centralize hazard insurance, improving risk management and financial stability.