It was a great privilege to attend and participate in “A World in Disarray?”, Swiss Re’s 15th Conference for Large Accounting Firms held in October 2024. Here are some personal thoughts that were inspired by the dialogue and that appear relevant to the worlds of uncertainty, risk, and risk management.

The theme of Swiss Re’s conference two years ago was “Sea Change”. Then we examined tectonic shifts, or Megatrends, encompassing major economic, societal, environmental, and geopolitical movements, and the risks arising from them. These were identified as interlocking challenges with multiple interdependencies.

A fundamental question was explored: are we living through a catastrophic rift, or is it a case of, this too will pass? I think we now know the answer to that question.

This year the conference examined geopolitical and security issues in these times of rapid change and assessed the effects on risk, on individuals, and on our decision making.

A World in Disarray?

Geopolitical tensions create risks that impact the economy, society, and businesses. Geopolitical risk has moved up the rankings in numerous risk surveys. The conference looked at current political and security issues from several angles. The subject of what constitutes reality, and our differing perceptions of it, was a consistent thread.

Many parallels can be drawn from today’s “disarray” with how we think about risk and resilience, both in a narrow sense, and in the broad strategic horizon.

• New risks and threats are emerging, but do we fully understand them, have we learned from the past and are we applying the correct reasoning?
• Complexity, including the effects of technology, creates fundamental uncertainty and challenges decision makers.
• There is hyper-connectivity between threats in today’s world; COVID, nationalism and war, for example.

How Do These Factors Manifest Themselves?

There is continuity with, and similarities to, past crises. Lessons exist that can be applied to today’s issues, but there sometimes seems to be an unwillingness or inability to learn and apply those lessons. Uncertainty and complexity are a difficult combination to manage. This makes human error more likely.

Today risks are interconnected and terms such as Polycrisis, spiraling crisis, and a tornado of crises were used. This problem accumulation can lead to an individual feeling of helplessness. Narrow thinking and a failure to face reality may also intervene and create leadership malfunction or failures in governance.

Importance of Individual Decisions

Living in a period of “accelerated time” was a powerful concept introduced into the debate: yet in so many political spheres nostalgia is invoked.

Managing the consequences of accelerated time requires new skills. Psychological and philosophical considerations arise for individuals coping with significant change. Narrow thinking and bias result in a failure to see the whole picture. Failures of intelligence and interpretation can arise from such shortcomings, sometimes with very negative consequences.

Narratives around corporate failures or significant accidents often expose points at which denial, collective bias, or internal pressures led to errors of interpretation. The wrong decisions resulted, often because the wrong criteria were employed.

Recognizing and facing up to the realities of today’s risks are therefore vital attributes. Nostalgia can create a narrowing of vision. The conference demonstrated very clearly the value of multidisciplinary approaches to the recognition and diagnosis of problems, and the design of solutions.

Psychological Safety and Challenge

International failures have real consequences for all of us. The challenges are very evident in economics and politics, and social change, and people risks arise that need to be recognized.

Change can often come from the margin. New or contrary ideas may irritate us, but they will expand our minds. We need to build an open culture that permits individual expression and challenge.

In that regard we should be wary of our conventional defenses, or our chosen fallacies, that may give us too much confidence in accepted protections such as quality control, our procedures, technology, and professional rules.

The best decision may remain unclear, but accessing more data, examining our motivations and using the correct decision criteria will optimize the result.

A multiskilled response is a crucial success factor. The past has many lessons. Values, ethics, and morality should guide us.

It was suggested at the Swiss Re Conference in 2022 that for building resilience, historians, political economists, and psychologists may have a place at the table. That was clearly demonstrated this year as we listened to speakers from several disciplines.