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Risk Management News


This section features the latest news on risk management, compiled from various credible sources. The complete articles are available by clicking the links.

  •  
    It was only a few years back that the maturity of oil industry, added by the increasing awareness of environmental problems, finally gave birth to the electrical vehicles. Today, we are ready to greet an even more advanced innovation in the automotive industry: an autonomous vehicle (AV)—a self-driving car—that has the capability to sense and navigate the road without relying on human input through the existence of Artificial Intelligence (AI).

    Below are some articles surrounding Autonomous Vehicles that you should know.
     
     

    • Significantly lower accident rate

    “If about 90% of cars on American roads were autonomous, the number of accidents would fall from 6 million a year to 1.3 million. Deaths would fall from 33,000 to 11,300, according to a study by the Eno Centre for Transportation”
    [Tech Insider]

     
    • Smoother traffic flow and lower energy use 

    “When vehicles can interact with each other and road infrastructure – such as traffic control systems – this will smooth out the traffic flow. The result will be less congestion and a reduction in energy use of up to 4%. On top of this, automated “ecodriving” – a driving style which controls speed and acceleration for more efficient fuel use – can reduce energy use by up to 20%.”
    • Higher productivity and value creation

    “AVs could free as much as 50 minutes a day for users, who will be able to spend traveling time working, relaxing, or accessing entertainment. The time saved by commuters every day might add up globally to a mind-blowing one billion hours—equivalent to twice the time it took to build the Great Pyramid of Giza. It could also create a large pool of value, potentially generating global digital-media revenues of €5 billion per year for every additional minute people spend on the mobile Internet while in a car.”
     

        

    • At least 33 corporations are working on Autonomous Vehicles

    “Private companies working in auto tech are on pace to attract record levels of deals and funding in 2016, with autonomous driving startups leading the charge. As expectations around self-driving vehicles have risen, major corporations have ramped up their own initiatives, racing to deploy technology onto public roads.”
    • 10 million self-driving cars are expected to be on the road by 2020

    “Self-driving cars are no longer a futuristic idea. Companies like Mercedes, BMW, and Tesla have already released, or are soon to release, self-driving features that give the car some ability to drive itself. (…) By the end of the forecast period, we expect there will be nearly 10 million cars with one of our defined self-driving car features.”
    [Business Insider]

    • World’s first self-driving taxis hit the road in Singapore

    “Singapore became the first country in the world to launch a self-driving taxi service on Thursday (August 25, 2016), beating ride-hailing giant Uber Technologies Inc. by mere days to public road tests of a technology that could revolutionize the transport industry.”
    • Uber’s first self-driving fleet arrives in Pittsburgh

      “Starting later this month (August, 2016), Uber will allow customers in downtown Pittsburgh to summon self-driving cars from their phones, crossing an important milestone that no automotive or technology company has yet achieved.”
      [Bloomberg]
     

      

    • Tesla driver dies in first fatal crash while using autopilot mode

    “Against a bright spring sky, the car’s sensors system failed to distinguish a large white 18-wheel truck and trailer crossing the highway, Tesla said. The car attempted to drive full speed under the trailer, ‘with the bottom of the trailer impacting the windshield of the Model S’, Tesla said in a blog post.”
     
     
  • Behind the celebration, limelights and fireworks of Rio Olympics 2016, there are reports and stories saying that the Olympics is actually a dark time for Rio de Janeiro. Poor infrastructure, political conflicts, and risk of terrorism looms over the city, as thousands of athletes compete for glory – here’s what the media think about Rio Olympics 2016.

    "Although the Olympics generates revenue, it also requires a huge initial budget – setting up the event can be extremely expensive and render a city near bankrupt, as seen in the past. Despite having a positive impact on Rio’s tourism figures, locals have a lot to lose in light of the Olympics, not least their livelihoods and homes."
    [World Finance]
     
     
    "With Brazil’s economy in free-fall, unemployment is reached 10.9%, calling into question the middle-class dream for millions of Brazilians. While there is an argument the games could spur economic growth by creating jobs, including more than 80,000 security personnel, many Brazilians think the money should be spent on less frivolous ends."
     
    "If Athens 2004 taught us anything, it was that giving the biggest sporting event on the planet to a country in pending economic turmoil is a terrible idea. The months leading up to the 2016 Summer Games saw Rio engulfed in political protest as the government prioritized the Olympics over anything else."
    [News.com.au]
     

    "To combat the crime problem in Rio, Brazil is calling in thousands of police officers from around the nation to help, but that may not be enough, and it certainly will make venturing beyond Rio more of a gamble for visitors because police protection there will be minimal."
    [Forbes]
     
    "Fears over the health of some 1400 athletes competing in water-based competitions at the Rio Olympics over the coming weeks have intensified following the publication on Monday of a survey which suggested that Rio’s waterways are still contaminated with raw sewage and teeming with viruses and bacteria."
    [Telegraph.uk]
     
    "Radical Islamist terror attacks on the Olympics are very possible because of multiple arrests in recent weeks and that Brazil has proven itself to be a fertile breeding ground for Islamist extremist ideology."
    "The Zika virus — which has garnered the world’s attention, prompted several star athletes to skip the Olympics and stirred bitter debate over whether the Rio Games should go on."
    [USAtoday]
     

    "Market sources estimate that the exposure of the insurance industry to an event such as the summer Olympics can reach more than $1bn in cancellation and abandonment policies alone."
     
    "The way the Olympics gets built begins with an organization called the Olympic Delivery Authority (ODA). This is an oversight committee that makes sure it has all the right partners in place and a management structure that looks across all of the different facilities being put together. Think of the ODA as an oversight-management firm. It also works with several other groups with expertise in architectural design, detailed engineering, and program management."
    [CFO.com]
     
    "Key to the success of the (Olympic Delivery Authority) ODA’s approach was a strong risk management framework. This comprised a clear risk hierarchy, detailing the responsibilities of individuals within the risk team, to ensure the right people were tasked with managing the right risks; a robust quantified risk analysis controlling contingency allocation and a healthy balance of review, assurance and audit promoting an ‘honest’ culture of risk awareness."
    [StrategicRiskGlobal]
  • By Bayo Babalola, ERMCP
     
    Managing risks is a strategic challenge for organizations, which must face threats increasingly complex and diverse. Introduced in 2009, the ISO 31000 standard is intended to help organizations to manage in a systematic and comprehensive manner diverse types of risk by offering a universal framework ‘to assist the organization to integrate risk management into its overall management system
     
    ISO 31000 is a family of standards relating to risk management. The purpose is to provide principles and generic guidelines on risk management. ISO 31000 seeks to provide a universally recognised paradigm for practitioners and companies employing risk management processes to replace the myriad of existing standards, methodologies and paradigms that differed between industries, subject matters and regions.
     
    Risk management refers to a coordinated set of activities and methods that is used to direct an organization and to control the many risks that can affect its ability to achieve objectives. Risk management’s objective is to assure uncertainty does not deflect the endeavor from the business goals
     
    According to the standard ISO 31000 "Risk management – Principles and guidelines on implementation, the process of risk management consists of several steps as namely:
     
    ESTABLISHING CONTEXT
    This includes an understanding of the current conditions in which the organization operates on an internal, external and risk management context.
     
    IDENTIFICATION
    After establishing the context, the next step in the process of managing risk is to identify potential risks. Risks are about events that, when triggered, cause problems or benefits. Hence, risk identification can start with the source of our problems and those of our competitors (benefit), or with the problem itself.
     
    ASSESSMENT
    Once risks have been identified, they must then be assessed as to their potential severity of impact (generally a negative impact, such as damage or loss) and to the probability of occurrence. These quantities can be either simple to measure, in the case of the value of a lost building, or impossible to know for sure in the case of the probability of an unlikely event occurring. Therefore, in the assessment process it is critical to make the best educated decisions in order to properly prioritize the implementation of the risk management plan.
     
    ANALYZING/QUANTIFYING RISKS
    This includes the calibration and, if possible, creation of probability distributions of outcomes for each material risk.
     
    INTEGRATING RISKS
    This includes the aggregation of all risk distributions, reflecting correlations and portfolio effects, and the formulation of the results in terms of impact on the organization’s key performance metrics.
     
    ASSESSING/PRIORITIZING RISKS
    This includes the determination of the contribution of each risk to the aggregate risk profile, and appropriate prioritization.
     
    TREATING/EXPLOITING RISKS
    This includes the development of strategies for controlling and exploiting the various risks.
     
    MONITORING AND REVIEWING
    This includes the continual measurement and monitoring of the risk environment and the performance of the risk management strategies.
     
    Finally risk managed using the ISO 31000 way gives the following:
    • A structured, credible foundation for discussions about risk and risk management.
    • A starting point for a risk management process if there is none.
    • A standard vocabulary for talking about risk and risk management
    • A baseline for comparisons and assessment of risk management process