After a great birthday reception yesterday evening, with RMS celebrating thirty years in business, the time to look back had past, as the keynote sessions for day two at Exceedance were all about looking to the future. Opening the general session keynote, Karen White, chief executive officer, welcomed our guest speaker to the Exceedance stage, renowned disruptive innovation expert and futurist, Daniel Burrus. A New York Times best-selling author, Daniel’s most recent book is entitled “The Anticipatory Organization: Turn Disruption and Change into Opportunity and Advantage”.
Daniel delivered a dizzying array of examples illustrating the enormity of technology-driven change in both our business and personal lives – and change just seems to be accelerating at an exponential rate. Daniel gave a simple example of how machine learning and artificial intelligence can find us the perfect meal recipe using IBM Watson, its renowned question-answering computer system which attracted early fame in 2011 when it beat two legendary champions on the TV quiz show Jeopardy!
The sheer scale of this undertaking for what feels like a human-centered task of combining food ingredients is astonishing, as Daniel says it has one million cookbooks to call on, and considers every minute detail of your suggested base ingredients, in just a second. And machine learning and artificial intelligence is permeating into many, many tasks – giving superpowers, as Daniel asked us to imagine your accountant armed with knowledge of every tax code in the world, or your lawyer knowing every case and judgement.
How can organizations survive and thrive in this age of transformation? Daniel stated that simply reacting to problems and digital disruptions, no matter how agile you and your organization are, is no longer good enough. The anticipatory organization is necessary as digital transformation has divided us all into two camps: the disruptor and the disrupted. To succeed, organizations need to see disruption before it happens, to turn change into advantage. Daniel offered a simple framework to help scan the disruptive environment, by understanding how to separate “hard trends” that will happen, from the “soft trends” that might happen, to minimize risk and provide confidence to move forward.
Karen also welcomed Robert Muir-Wood, chief risk officer at RMS and Michael Steel, global head of market development at RMS, to tackle the topic of the future of risk. Robert took us back fifteen years to 2004, when RMS had completed a study published in Risk and Insurance magazine, to identify, for ten key U.S. rapid onset hazards from earthquake to blackout, a set of potential catastrophes that would reflect the one percent annual probability (or “100-year average return period”) future loss in each category.
Robert wondered if the projections made back then across the ten categories had held out, and how did they compare with what had actually happened? Which categories had we experienced one percent or greater annual probability losses? The projection was for three one-in-fifty-year events, and a single one-in-one-hundred year loss event. He gave himself an A or A- grade for the validity of these projections, as they stacked up well, but one event really stood out, with the oil spill from the Deepwater Horizon platform in 2010, a two-hundred, or even a one-in-five-hundred-year event.
He raised the issue of “Blue Chip Cats” where corporations cause catastrophes, and highlighted some of the root causes, such as weak regulation. Michael Steel continued the theme, to now look at ten future risks, such as issues around the “Human Software Interface” – where software failure results in a disaster, to “Hybrid Warfare” and the re-emergence of old risks.
And across the track sessions at Exceedance, innovation, analysis of risk trends, and harnessing technology, are helping delegates to get practical solutions and approaches to tackle the future of risk. There are lots of questions too – the Expert Bar, where delegates can get answers to their questions from our many expert colleagues, is proving very popular.
After a hard day contemplating the future, Exceedance delegates will be going back in time this evening with the “Decades” themed EP party, as we continue celebrating thirty years of RMS. Fashion clashes are guaranteed, as delegates choose which decade to dance the night away to, will it be the seventies, eighties or nineties – it is a tough decision to make!