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Article: Likelihood versus certain.(RISK MANAGEMENT)
- Article from:
- Risk & Insurance
- Article date:
- March 1, 2007
- Author:
CopyrightCOPYRIGHT 2007 Axon Group. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Hurricane Katrina is not yet over. While the first round of destruction created gruesome damage, the secondary and tertiary waves are wreaking havoc on our assumptions about uncertainty and risk management. Uncertainty, it appears, is not quite so certain as we had once supposed. Risk management, which we had assumed led to good decisions and therefore to favorable outcomes, might actually have nothing to do with favorable results.
In the aftermath of Katrina, the world started paying attention to the various models that yearly predict the likely frequency, severity and locations of hurricanes. But at the beginning of 2006, the models were predicting a very bad ...