Overview

The steady stream of natural and man-made disastrous events (hurricanes, tsunami, terrorism, civil wars) experienced throughout the world in the last few years has stimulated a great deal of interest in both sustainability and resilience. The dialogue has expanded to include not only psychological, social, and ecological approaches to sustainability and resilience, but also organizational, institutional, and national approaches. Resilience and sustainability have emerged as important frameworks for developing our personal, communal, and organizational capacities to withstand shocks, anticipate risks, and remain fully operational under conditions of extreme or prolonged duress while preserving our natural life-support systems.

Because of the increased frequency and scale of these extreme natural and man-made events, our current global operating reality seems less certain and less predictable than it did a few decades ago. We operate in an increasingly complex interconnected world that is becoming more difficult to predict.

Prominent insurance companies that have successfully operated for the last 100 years on probabilistic risk models are seriously questioning if those same models can still be used reliably to support underwriting. They are recognizing the need to take into account the low probability, extreme events such as global warming that could quickly overwhelm the adaptive capacity of our societal systems. Insurance risk teams are becoming alarmed by the slow burn risks the systemic challenges arising out of incremental globalization changes that fall outside our line of sight because of our failure to consider the potential whole system impacts of the accumulation of these incremental...