Corresponding to the 10th anniversary of 9/11, Bloomberg BusinessWeek (5-11 Sept 2011) has a great article on risk management called The G-d Clause.
When insurers take out insurance--this is called reinsurance, and reinsurers are "on the hook for everything, for all the risks that stretch the limits of the imagination"--that's referred to as The G-d Clause--whatever the almighty can come up with, the "reinsurers are ultimately responsible for" paying for it.
And obviously, when insurers and reinsurers don't well imagine, forecast, and price for risky events--they end up losing money and potentially going out of business!
Well when it came to 9/11, insurers lost fairly big financially--to the tune of $23 billion (it is in fact, the 4th costliest disaster since 1970 after Japan's tsunami, earthquake and Fukushima nuclear disaster ($235B), and hurricanes Katrina ($72B) and Andrew ($25B) in the U.S.)
Even Lloyd's "that invented the modern profession of insurance [and] publishes a yearly list of what it calls 'Realistic Disaster Scenarios,'" and while they had imagined 2 airlines colliding over a city, even they failed to anticipate the events of September 11, 2001.
According to the article, even insurers that make their living forecasting risks, "can get complacent."
And the psychology of the here and now, where "people measure against the perceived reality around them and not against the possible futures" is the danger we face in terms of being unprepared for the catastrophic events that await, but are not foretold.
In a sense, this is like enterprise architecture on steroids, where we know our "as-is" situation today and we try to project our "to-be" scenario of the future; if our projection is to far off the mark, then we risk either failing at our mission and/or losing money, market share, or competitive advantage.
The ability to envision future scenarios, balancing reality and imagination, is critical to predict, preempt, prepare, and manage the risks we face.
Post 9/11, despite the stand-up of a sizable and impressive Department of Homeland Security, I believe that our achilles heel is that we continue to not be imaginative enough--and that is our greatest risk.
For example, while on one hand, we know of the dangers of weapons of mass destruction--including nuclear, chemical, biological, and radiological devices--as well as new cyber weapons that can threaten us; on the other hand, we have trouble imagining and therefore genuinely preparing for their actual use.
Perhaps, it is too frightening emotionally or we have trouble coping practically--but in either case, the real question is are we continuing to proceed without adequate risk-loss mitigation strategies for the future scenarios we are up against?
Frankly, living in the suburbs of our nations capital, I am fearful at what may await us, when something as basic as our power regularly goes out, when we get just a moderate rain storm in this area. How would we do in a real catastrophe?
In my mind, I continue to wonder what will happen to us, if we proceed without taking to heart the serious threats against us--then the tragic events of 9/11 will have unfortunately been lost on another generation.
Like with the reinsurers, if we do not open our minds to perceive the catastrophic possibilities and probabilities, then the risky business that we are in, may continue to surprise and cost us.
(All opinions my own)