An evolutionary approach to emerging and enterprise risks

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By Neil Allan , Neil Cantle | 20 January 2012

Risks bear considerable similarities to organisms: They exist in a particular environment, change over time, and have uncertain outcomes. The evolution of risk is partly determined by the uncertain nature of risks and partly by the environment and human intervention.

In the 18th century, Linnaeus pioneered a classification system by grouping organisms in accordance with their similarities and differences. Linnaeus' work, much like traditional risk management, can be described as systematic, instead of evolutionary, as the objective was to place all known organisms into a hierarchical structure.

Phylogeny, on the other hand, being inspired by Darwin's evolutionary approach, not only indicates the similarities and difference between species, but also illustrates their evolutionary relationships.

Risks, like organisms, can be classified in accordance with their evolutionary relationships to obtain insight and knowledge regarding the patterns that emerge through phylogenetic analysis. A risk DNA can be achieved, and, as in biology, it could start to unlock some of the deep, interconnected secrets of complex risk behaviour.

Published by InsuranceERM.

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