The Tools to Face Uncertainty
Speakers at this year’s
in Philadelphia will
address political and
and how risk managers
can transform them
By Katie Siegel
The annual RIMS conference, held this year in Philadelphia, will focus on uncertainty.
The theme for this year’s annual RIMS conference, “Risk Revolution,” calls on attendees to “disrupt the status quo” in their organizations. This year in particular will challenge risk managers to change the way they think about the future. Around the world, political upheaval has wrought economic uncertainty. Brexit, Donald Trump’s surprise
presidential win, and other populist movements are shattering the very idea of a
These topics will be the subject of both session presentations and informal
discussions among the roughly 10,000 attendees converging on the Pennsylvania
Convention Center in Philadelphia from April 23-26.
“We have evolved in an ever-changing business environment so that the status
quo is no longer acceptable. It needs to be constantly revisited,” said RIMS CEO
Mary Roth. “In every industry, what we did in the past may not be the best way to
proceed in the future.”
Patrick Harker, president and CEO of the Federal Reserve Bank of
Philadelphia, said in an early January segment on Wharton Business Radio that
“my biggest concern is concern. The biggest risk we face is uncertainty.”
Uncertainty is so ominous because unlike a defined risk, it is not necessarily
“Risk is best defined as an ‘unknown’ that has a measurable probability
of outcome. Uncertainty, on the other hand, involves an unknown with no
measurable probability of outcome,” said Scott Addis, president and founder of
Beyond Insurance and a speaker at the conference.
“Uncertainty is not quantifiable because future events are too unpredictable
and information is insufficient.”
Uncertainty will affect U.S. businesses on multiple fronts. Corporate tax
changes and international trade policies are two examples.
Import tariffs and potential trade restrictions imposed with the intention
of boosting American manufacturing and job creation could also limit free
competition globally and drive up operating costs.
“This can happen in any country that adopts nationalistic policies. From
a management perspective, we have to produce at a higher cost,” said Roger
Kashlak, professor of international business at Loyola University Maryland and
another presenter at RIMS this year.
Restrictive trade policies could also compound the negative impact of a strong
U.S. dollar, which makes American exports more expensive and less desirable
around the world. With a diminished standing in the global marketplace, it
may be hard for businesses to recoup the higher cost of labor that comes with
manufacturing at home.
“There’s a cost to this political churn if you play it out. In the short term, you will
create jobs that come with tax breaks for
businesses, and that’s a good thing. But
long term it’s very risky because we’ll
miss out on competitive benefits and
have higher costs,” Kashlak said.
Regulatory changes also come
with a set of pros and cons. In general,
less regulatory oversight means more
freedom and fewer costs of compliance,
which attracts foreign investment and
stimulates economic activity. But over
the long term, relaxed regulations could
The current administration’s stance
“The risk manager is in the
midst of a ‘risk revolution,’
evolving into a risk strategist
who is required to have plans to
deal with both controllable and
— Scott Addis, president and founder, Beyond
• Populist movements around
the globe present political and
• International trade policies,
tariffs and regulatory changes are
just a few things to watch.
• Risk managers have to examine
both the short and long term
impacts of these changes.