NU Online News Service, Feb. 1, 3:12 p.m.EST

In an environment of rapidly evolving risks, just anticipatingrisk is not enough, as organizations also need to focus on buildingresilience to effectively manage risk and position themselves forlong-term sustainability, says the chief executive of Willis GroupHoldings.

Speaking at the 2012 World Captive Forum, Joe Plumeri, chairmanand chief executive officer of Willis said hallmarks of a resilientorganization include acknowledging the difficulty of predicting thefuture or so called “black swan” events. Organizations need tooperate in a dynamic fashion to make adjustments in real-time whena catastrophe strikes, while simultaneously preparing for thefuture, he noted.

“In order for companies to build resilience, they need to askthemselves, will we be here in 10 years? Will we be here in 50years?” he said.

The forum convened this year inMiami, the site of the costliestdisaster inU.S.history. The greatMiamihurricane of 1926 resulted insevere loss of life and steep economic losses, which, adjusted for2010 inflation, would total $169 billion, according to datareleased by NOAA. The storm wiped out the city, largely due to aflawed response, Plumeri said.

A leading catastrophe modeler estimated that this storm todaywould cause an estimated $101 billion in insured losses drawingdown a significant portion of the global-insurance capacity, hesaid.

“Traditional property and casualty risks endure, but the natureof risk is changing,” Plumeri said.

The top risks on the minds of business leaders today are noteasily solved by purchasing insurance, he continued, citingexamples such as loss of customers, regulatory investigations, andreputational risk. Meanwhile, the global marketplace continues todrive other risks including political, supply chain, cyber, andbalance-sheet risk, he said.

“As the risk landscape evolves and includes both natural andman-made catastrophes, organizations need to build resilienceagainst the unpredictable. Insurance serves as a powerful ally fororganizations to tackle these new risks and in many ways, insuranceis the bridge between anticipation and resilience,” he said.

The captive-insurance industry, he noted, was born out of theinsurance-liability crisis of the 1980s, and began as an “exercisein anticipation” as risk managers needed solutions when they foundthe insurance marketplace unreliable. Now, captives stand as atestament to resilience, Plumeri said.

“The captive-insurance industry has evolved and now offers arobust and effective approach to help firms become resilient in theface of unpredictable risks. Captives play a key role in theinsurance industry, offering creative solutions for criticalrisks,” Plumeri said.