An insurance pro's practical guide to 'black swan' events

‘Black swans’ are highly unlikely and relatively unforeseeable events with potentially extreme adverse consequences. There’s a benefit to brainstorming these scenarios along with possible risk mitigation and response tactics. (ALM Media archives)

Imagine if only a couple months ago you had told colleagues that life as we know it was about to be ransacked by a pandemic. It probably would have elicited little more than the same “I suppose it’s possible” response, as any earlier prognostications of airplanes crashing into buildings, earthquakes causing a tsunami leading to a nuclear catastrophe, or a near-collapse of the global financial system.

Had you been certain that such things were about to happen, you might have taken some additional preparation steps, but you didn’t because the near-term likelihood was way too low, and the universe of possible bad things is much too broad.