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A review of the use of complex systems applied to risk appetite and emerging risks in ERM practice

This paper applies systems thinking to help define a company's appetite for risk and subsequently assess difficult-to-quantify risks in a rigorous manner. The method looks at interconnections and integrating qualitative and quantitative measures.

A review of the use of complex systems applied to risk appetite and emerging risks in ERM practice

Content type: Best practice

Last updated: 01 January 2023

Author/s: The Actuarial Profession

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This 76-page paper gives a methodology for integrating Concept Mapping and Bayesian Networks in a systems thinking approach, which can be used for judging risk appetite and emerging risks. It also gives a glossary of relevant terms in systems thinking and risk management.difficult-to-quantify

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