Emerging Risk Identification and Evaluation Emerging Risk Management, Reto Schneider Emerging Risk Governance

 Exploring/Scouting

 Detecting

 Reporting

 ?

Emerging Risk Management | Reto Schneider Strolling

 not directed

 accidental

 surprise

 adventure

 hanging out

Emerging Risk Management | Reto Schneider Scouting

 directed

 focused

 clear task

Emerging Risk Management | Reto Schneider Sensing

 Senses

 Technology

 Network

Emerging Risk Management | Reto Schneider Screening

 Raster/Grid

 Perimeter

 Plan

Emerging Risk Management | Reto Schneider Emerging Risk Management | Reto Schneider Galapagos finches showing different beak shapes

Emerging Risk Management | Reto Schneider Emerging Risk Management | Reto Schneider Emerging Risk Management | Reto Schneider Emerging Risk Management | Reto Schneider Emerging Risk Management | Reto Schneider Risk Management Process

Risk Policy Risk appetite 1. What can Risk tolerance happen? Legal environment, public opinion 2. What can we do to prevent Risk Control Risk Strategy Risk Assessment it? Evaluation Risk Management Perception 3. Can we Steering Goals & Identification afford the Monitoring Communication Analysis prevention? Quantification

Risk Treatment Avoidance Prevention, Reduction Financing, Retention

Emerging Risk Management | Reto Schneider 13 Risk assessment

 How does the system work? hazard  What is the benefit / use?

 What can go wrong? value at risk  What is the consequence? „exposure“  Public acceptance? risk mitigation  Quantification: Any numbers?

 What could be done in terms of loss prevention?

 Is the prevention affordable?

 What is the accepted residual risk?

Emerging Risk Management | Reto Schneider Slide 14 Global Risk Assessment Framework

Drivers (Op. Environment) Life & Health

Perceived Intensity Natural Value Physical Catastrophe Property Assets/ Hazard Vulnerability (Hazard vs. Asset) Lives Financial Man-made Wealth & Protection Frequency Income Measures Social & Psychological Risk Scenarios

Ecological

How Big? How Shocking? How Likely? (contagion, speed, (Impact in $) (Likelihood) accumulation)

Risk Severity

15

Emerging Risk Management | Reto Schneider The SONAR process ensures that early signals are identified, assessed and acted upon

Monitoring & Input Assessment Implementation control

Emerging Risk Management (ERM) responsible Emerging Risk Management support on demand

Product and/ Product Media Business or strategy launch and Pre-assessment, plan Business development marketing Internet prioritisation and spark clustering Think Unrealised opportunity Seized opportunity UPSIDE tanks

Swiss Re business Early signal Emerging risk Signal is fading & staff

External initiatives Uncontrolled risk Controlled risk Consolidation and Risk Development Implementation Univer- interpretation of Loss spark of mitigation of mitigation sities early signals scenarios

measures measures DOWNSIDE

Time

Emerging Risk Management | Reto Schneider 16 Swiss Re (Client) SONAR in a nutshell

Emerging risks are an The intention of the report is important concern for to share emerging risk the insurance industry insights with our clients and and its clients. other stakeholders to Awareness has risen a) act as door-opener for steadily over the last discussions on various years. topics, b) trigger in-depth exchange about emerging risk mgt. With SONAR, Swiss Re and/or selected emerging has established a solid risk topics, process for identifying, c) support Swiss Re's assessing and managing position as knowledge emerging risks. leader.

The Swiss Re SONAR The Emerging Risk Mgt. team report presents insights informs and drives debate on on 25 emerging risk emerging risks with clients and themes. other stakeholders.

17 Emerging Risk Management | Reto Schneider General Public Release

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©2014 Swiss Re. All rights reserved. You are not permitted to create any modifications or derivative works of this presentation or to use it for commercial or other public purposes without the prior written permission of Swiss Re.

The information and opinions contained in the presentation are provided as at the date of the presentation and are subject to change without notice. Although the information used was taken from reliable sources, Swiss Re does not accept any responsibility for the accuracy or comprehensiveness of the details given. All liability for the accuracy and completeness thereof or for any damage or loss resulting from the use of the information contained in this presentation is expressly excluded. Under no circumstances shall Swiss Re or its Group companies be liable for any financial or consequential loss relating to this presentation.

18 XL Workshop 2014 Thank you