The headline in the December 17, 2012 issue of Property ­Casualty 360—National Underwriter read "Uncertainty Rules Risk ­Management Outlook in 2013." Risk managers were worried about what happened in 2012. Well, a lot happened last year—namely a dozen weather-related events that, along with other catastrophes, cost around $70 billion, and for that dozen, more than $1 billion each.

Last year was also the hottest year in history, and predictions of other forms of doom and gloom ranging from cyber attacks to volcanic explosions were rampant. Had the Mayans been right after all?

I recall arguing with George Head, Ph.D. of the Insurance Institute of America(IIA) in Malvern, Pa., many years ago about how one associate in risk management (ARM) course was ­designed back then when I was teaching it. (It may be different now.) I had spoken with his coauthor of one of the ARM texts in San Francisco. The coauthor agreed that too much emphasis on mathematical statistics could be misleading as to loss control issues. Dr. Head had cited an example of how a railroad would use statistical analysis to determine where a train might derail. As a transportation buff who has read hundreds of thousands of pages about railroads and their wrecks, I thought the example was rather silly.