This volume takes a pragmatic approach to decision-making in states of the world characterized by risk and uncertainty. It starts with a pragmatic defi nition of risk
(provided by Hubbard, chapter 2) as a state of uncertainty where some of the possibilities involve undesirable outcomes.

Following the American economist Frank L. Knight one could add further that decision-makers in risk situations are faced with unknown outcomes but known ex-ante
probability distributions. And it follows readily that decision-making and risk management would appear to be comparatively easy in these situations, as the model’s properties are known and data readily available. The task becomes more challenging in states of the world characterized more heavily by uncertainty. It is a world where outcomes extend over a range of possibilities and where, again following Knight, the probability distribution of a random outcome is unknown. In other words, it is a world of unknown unknowns where no data exist and modeling is not possible.

At first blush it would appear to be very diffi cult, if not to say impossible, to tackle the challenges caused by such uncertainty. However, it is the explicit purpose of this volume
to push the boundary and provide practical guidelines for risk management under high doses of uncertainty.

This 35-page report is written by Zurich Financial Services.  It summarizes the five insights for implementation and is dedicated to the community of risk managers.