Looking at past data can point to future outcomes. Most organizations set forth their well-thought plans, investments and strategic initiatives to build a successful future. We look at current outcomes and we tie the past to the reasons things are the way they are today. We often look at what is happening now and predict a future.
Conversely, past events can also hide defects and ignore facts that point to a negative future. Historical accounts may highlight positive qualities and create an asymmetry of information that over inflates the positive and any indication of the negative is not present. Other rare and catastrophic events may have not shown up in any samples, because they are in-fact, rare.
Add in the “human condition” when looking at historic and future outcomes, which entails a instinctive desire to assign plausibility and narratives to events. Random events and facts are often explained into a narrative to make sense of everything, it is the one of the cognitive instincts of people.
Important to Note: No evidence of risk is not evidence of no risk.
When seeking to protect organizations from losses, catastrophes or lost market share, the past isn’t always in indication of the future. We must strive for the best protection in the insurance programs and help companies build contingency plans to protect from the rare, unknown future event. Because rare events are almost always negative, preparedness for the unknown is critical for future success.
The good news is often seen or when it comes to us as a surprise, it is a pleasant event. Unfortunately, the bad news doesn’t show very easily and is rarely a pleasant experience.
Organizations should continue to strive for best practices on preparing for the unknown, the worst and semi-worst case in their strategic planning initiatives. If it has “never happened” one might want to prepare and not assume it won’t
We help companies plan for the catastrophe, prepare for the unknown. Insurance is one part of the preparedness, the organization must also undertake the true tasks of building a robust plan to respond and thrive a rare, catastrophic event.
by Brian Pilarski