Turning risks into opportunities

Have you ever thought of risk as an opportunity? While risk-taking is often encouraged in start-ups and investments, risk is generally seen as something negative to be avoided. At the SEF.Growth event hosted by Zurich Insurance, Juan Beer, CEO of Zurich Insurance Switzerland, and Peter Giger, Chief Risk Officer of Zurich Insurance, offered a refreshingly optimistic perspective on risk.

Understanding risk, not fearing it

"Risks are only a threat if they aren't understood or acknowledged," said Peter Giger, inviting the audience to see risk as something not to be feared. This is a surprising stance for an insurer, whose role is to warn us of risks and urge us to protect ourselves. However, Giger clarified this by stating: "We are risk experts, not fear experts. Once you understand the risk and its potential impact, you can prepare and control the outcome. The only truly frighteninging is the question: 'What risk do I not have on my radar?'”

Juan Beer emphasised the importance of foresight in navigating today's risk landscape. "We must always think one step ahead," he said, stressing the need to remain vigilant in a rapidly evolving world marked by geopolitical tensions, economic challenges and technological disruptions. Beer cited the upcoming US presidential election, China's economic slowdown and climate disasters as examples of risks that could have a far-reaching impact on global supply chains and markets. "Inaction is not an option," he added, stressing that companies must not only mitigate risks, but also identify opportunities within them. "Ignoring or fearing risk will get us nowhere."

Perceived risks vs. factual risks

Referring to the World Economic Forum's recent Global Risks Report 2024, Peter Giger noted that the report is more about how risks are perceived than how they actually are, as it is based on a survey.

He highlights five key observations to keep in mind when discussing risk:

Risk perception is subjective: Personal biases often cloud factual understanding, making risks appear larger or smaller than they are.
Short-term focus dominates: We tend to respond to immediate threats ("fight or flight"), neglecting long-term risks that may have far greater consequences.
Risk avoidance stifles progress: For society to progress, we must embrace risk. "Without risking mistakes, there can be no innovation".
We romanticise the past and exaggerate the present: The belief that "life used to be easier" or "the world is getting worse" is misleading. There have been wars, inequalities and environmental crises throughout history. The world is not worse - it's just different.
Technology isn't the enemy: We often blame technologies like AI for problems like fake news, but human behaviour - like an increased willingness to lie - is the real problem. Similarly, the internet is blamed for data breaches, but stolen records existed long before that. In reality, technology has brought far more positive change than negative, including job creation.

Cyber insecurity: One “Top 5 Risk” over the next two years

Peter Giger presented the top five risks for the next two and ten years. One of the key risks is increasing cyber insecurity - a topic that was explored in depth in a live hacking session by Gunnar Porada, a leading expert in the field of cyber security. In an impressive demonstration, Porada showed how quickly and easily significant damage can be done. A key takeaway: when asked how to protect yourself effectively without spending a lot of money on security, Porada emphasised that a lack of prevention can be far more costly in the event of a breach than proactive prevention.

Conclusion: Risk is a catalyst for innovation

The event made one thing abundantly clear: risk is an integral part of progress. By understanding and anticipating risk, we can not only protect ourselves from potential pitfalls, but also unlock opportunities for innovation and growth. In today's world, it is no longer viable to avoid risk or live in fear of it. As both Juan Beer and Peter Giger emphasised, the key is to embrace risk with an optimistic mindset and a proactive approach.

Risk itself is not the problem. The real danger lies in not recognising or understanding it. Once risk is understood, it can be managed, mitigated and even turned into a catalyst for success. The world is changing - and while that brings uncertainty, it also brings the possibility of a better future, shaped by those willing to embrace the challenges that lie ahead.

SEF.Growth Event with Zurich Insurance

From Data to Action - Understanding and Managing the Risks of Tomorrow