Counterfactual Risk Analysis - look back to think ahead
- By Gareth Byatt
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- 08 Nov, 2017
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What if the wind had blown radioactive contamination onshore when the Fukushima nuclear plant was struck by a tsunami in 2011? What if West Africa had been embroiled in civil war during 2014’s Ebola crisis?
Major global events like these could have had even more serious impacts if things had happened just a bit differently.
The same is true of other risks that turn into events, be they on a global scale or smaller.
Lloyd’s, together with modelling company RMS, have published a new report – entitled Counterfactual Disaster Risk Analysis: Reimagining History - setting out how a type of lateral thinking, called counterfactual thinking, can be applied to look at risk. Whilst the report focuses on insurance, it is equally valid for all of us who manage risk.
The report discusses how counterfactual risk analysis – considering how historical near misses might have become major disasters or crises – can be carried out. It is a starting point for future research into counterfactual events and their characteristics.
I spoke to one of the authors, Gordon Woo, recently. Gordon described to me how this thinking can be a useful "lens" for people to apply, to learn from the past when looking forwards at how to manage risk. Using counterfactual risk analysis we can view risks in a holistic manner, to better understand the range of impacts to achieving objectives and targets that we set ourselves, and to decide what kind of actions we should best undertake to work towards these objectives.This approach applies equally to business managers and people in government and non-governmental organisations; it is not just for Risk and Insurance practitioners. There is synergy with the concepts of a High Reliability Organisation (an HRO) in the approach that is put forward. Using a counterfactual risk analysis “lens” can help you to assess the likelihood and extent of all reasonable potential consequences in a disciplined and systematic fashion. It can be used to review the risks you face, from your strategy formulation to detailed operational management. Done well, it can help inform the robustness of the plans that are being agreed.
This is a very interesting piece of work, which I encourage people to read and think about.
Major global events like these could have had even more serious impacts if things had happened just a bit differently.
The same is true of other risks that turn into events, be they on a global scale or smaller.
Lloyd’s, together with modelling company RMS, have published a new report – entitled Counterfactual Disaster Risk Analysis: Reimagining History - setting out how a type of lateral thinking, called counterfactual thinking, can be applied to look at risk. Whilst the report focuses on insurance, it is equally valid for all of us who manage risk.
The report discusses how counterfactual risk analysis – considering how historical near misses might have become major disasters or crises – can be carried out. It is a starting point for future research into counterfactual events and their characteristics.
I spoke to one of the authors, Gordon Woo, recently. Gordon described to me how this thinking can be a useful "lens" for people to apply, to learn from the past when looking forwards at how to manage risk. Using counterfactual risk analysis we can view risks in a holistic manner, to better understand the range of impacts to achieving objectives and targets that we set ourselves, and to decide what kind of actions we should best undertake to work towards these objectives.This approach applies equally to business managers and people in government and non-governmental organisations; it is not just for Risk and Insurance practitioners. There is synergy with the concepts of a High Reliability Organisation (an HRO) in the approach that is put forward. Using a counterfactual risk analysis “lens” can help you to assess the likelihood and extent of all reasonable potential consequences in a disciplined and systematic fashion. It can be used to review the risks you face, from your strategy formulation to detailed operational management. Done well, it can help inform the robustness of the plans that are being agreed.
This is a very interesting piece of work, which I encourage people to read and think about.
I was delighted to be invited by the Municipality of Bordeaux in France to take part in their resilience month ( le mois de la résilience) in mid-October 2024 - just as I did the previous year, in October 2023.
We held very interesting in-person discussions about how my Urban 2.0 framework and system can be used by cities and towns around the world, and also the release of the UNDRR Global Assessment Report, Special Report 2024, which I was delighted to contribute towards.
The municipality of Bordeaux is continuing to pursue some excellent work in urban resilience, which I will be profiling in due course...
We held very interesting in-person discussions about how my Urban 2.0 framework and system can be used by cities and towns around the world, and also the release of the UNDRR Global Assessment Report, Special Report 2024, which I was delighted to contribute towards.
The municipality of Bordeaux is continuing to pursue some excellent work in urban resilience, which I will be profiling in due course...
Almost half of Small Island Developing States' (SIDS) populations reside in urban areas. Research into urban resilience and urban planning tends to focus on cities in large nations, and only a relatively small amount of specific research on SIDS cities currently exists. However, much of the general urban resilience research is applicable to SIDS, as long as context is considered.
This paper focuses on ways to implement measures that will foster resilient and dynamic cities in SIDS. Ensuring good policy action to build, maintain and continuously improve these cities is key to achieving sustainable development and resilient prosperity as set out in the Outcome Document of the Fourth International Conference for Small Island Developing States (SIDS4).
I am delighted to be one of the presenters at the SIDS Future Forum (with a focus on how to build resilient and dynamic cities on small islands).
With growing challenges like climate change, debt burdens, and dwindling resources, they desperately need an actionable, doable, and ambitious roadmap for the next decade. 2024 is an important year for SIDS, with the SIDS4 conferencetaking place in May.
You can access details about the Forum on the Island Innovation website, here.
With growing challenges like climate change, debt burdens, and dwindling resources, they desperately need an actionable, doable, and ambitious roadmap for the next decade. 2024 is an important year for SIDS, with the SIDS4 conferencetaking place in May.
You can access details about the Forum on the Island Innovation website, here.
The second edition of the Disasters Avoided Newsletter is live. You can access it here.
I am delighted to announce that a new Newsletter has commenced - the Disasters Avoided Newsletter.
You can read edition #1 here. This first edition is an introduction to our work, containing a summary of some of the work we are undertaking, links to case studies and interviews with people about different aspects of avoiding disasters.
You can read edition #1 here. This first edition is an introduction to our work, containing a summary of some of the work we are undertaking, links to case studies and interviews with people about different aspects of avoiding disasters.
I am delighted to announce the launch of a new website, disastersavoided.com. In this website, myself and my colleagues Ilan Kelman and Ana Prados are compiling case studies to describe how disasters have been, are being and need to be avoided through a symphony of action. We are also adding supporting information in the shape of interviews, papers, articles and links to Newsletter editions...
I was delighted to be invited by the Municipality of Bordeaux in France to take part in their resilience week ( la semaine de la résilience) in mid-October 2023.
We held a very interesting in-person round table discussion with citizens about how disasters can be avoided.
The municipality of Bordeaux is pursuing some excellent resilience work, which I will be profiling in due course...
We held a very interesting in-person round table discussion with citizens about how disasters can be avoided.
The municipality of Bordeaux is pursuing some excellent resilience work, which I will be profiling in due course...
I was delighted to be a Presenter on a webinar held on 18 July 2023 led by the United Nations Development Programme (UNDP) in partnership with the United Nations Office of Disaster Risk Reduction (UNDRR), which discussed the question: ‘Can disasters be avoided?’
We reviewed approaches being taken to prevent hazards from turning into disasters, including examples and how innovation is helping countries, cities and communities prevent adverse fallouts from hazard events.
You can access the webinar and download all presentations here.
We reviewed approaches being taken to prevent hazards from turning into disasters, including examples and how innovation is helping countries, cities and communities prevent adverse fallouts from hazard events.
You can access the webinar and download all presentations here.
My involvement in infrastructure continues, including editing the February 2023 Newsletter of the IRM Infrastructure Group, which you can access here.
I continue to serve on the committee of the IRM Infrastructure Group, and part of my role is to coordinate the Group Newsletter.
The December 2022 edition, which covers a wide variety of infrastructure-related topics, is available here...
The December 2022 edition, which covers a wide variety of infrastructure-related topics, is available here...