Author: David Geller, CPCU
“The riskiest stuff is always what you don't see coming."—Morgan Housel
For the seventh time, the ISO Emerging Issues team has just completed our annual bracket challenge, in which insurance and risk management professionals around the globe weighed in on what emerging risks are, or may become, most impactful.
For the first time, this bracket challenge did not coincide with its inspiration: the March basketball tournament. It should be no surprise that the topic that accrued the most votes in the 2020 challenge was the reason: Pandemic.
Novel coronavirus (COVID-19) has effectively turned the world upside down in recent months. Immediate effects have been felt across the conference circuit (the cancellation of SXSW), sports (Major League Baseball, an institution that pressed on during two World Wars, delayed the start of its season), and so much more.
In addition to short-term issues, which have been extensive, the cascading effects that have resulted from COVID-19 suddenly make the long-term trajectory of life and business quite murky. Disruptions in the supply chain have reportedly been so severe that drastic changes may be considered to create more resilience. Economic impacts may continue to reverberate for months, if not years, if and when the virus is ultimately contained.
It is likely because of these reasons, among many others, that the topic of Pandemic emerged as the top pick for the 2020 ISO EI bracket challenge.
While it is always intriguing to see who secures the most votes, a byproduct of this bracket is gleaning insights that can serve as guidance for ISO, as well as for our customers and those who choose to participate all the way through.
With respect to Pandemic taking the most votes, the lesson may not be in the outcome, which is frankly unsurprising given that participation in the bracket was taking place during COVID-19's global spread, but rather in the context of previous ISO Emerging Issues bracket challenges. Here is where Pandemic has finished prior to this year:
- 2014 – Lost in the first round
- 2015 – Lost in the first round
- 2016 – Lost in the first round
- 2017 – Lost in the first round
- 2018 – Lost in the first round
- 2019 – Relegated (wasn't even in the challenge)
For the first five years of this survey, Pandemic was hardly a major contender as the biggest emerging issue. In fact, they had been such a non-factor that ISO bracketologists didn't include the topic in the 2019 survey.
Now, after experiencing the unprecedented consequences that COVID-19 has wrought, Pandemic might just end up being the biggest risk of our generation.
Shortly before the challenge began and before COVID-19 really began wreaking havoc on the world, I read this article that now looks very prescient in hindsight. From the piece, a simple, albeit memorable quote, continues to echo in my head:
“The riskiest stuff is always what you don't see coming."
Moving forward, we may all be well served to heed this advice and recalibrate our assessment of risk accordingly. It is important to be cognizant and prepare for risks that are evolving before our eyes, such as rising sea levels and the flooding that may result. But, in the interests of risk management, it may be time to take it a step further and reconsider scenarios that have previously either seemed implausible or too intimidating to even contemplate.
Because, if nothing else, COVID-19 has now proven that, yes, it can happen to us.
Last Updated: April 7, 2020