“Behavioural Risk Management: The Added Value of Scenarios and Avoiding Biases” by Dr. René Doff (University of Amsterdam) addresses the importance of human behaviour in economic analyses.
In recent years, major risk-management failure could often be attributed to psychological pitfalls. Building on this insight, Doff acknowledges that the world around us is rapidly changing with complex and interacting developments and that this requires different tools than used in the past. In this way, “Behavioural Risk Management”, helps practitioners and experts to implement these latest insights in their work. According to Doff, system analysis and scenarios are much better equipped than stochastic models to prepare the risk manager for the future.
De Ruijter Strategy has put the future on the agenda of government and business for over 25 years, often using scenario planning. De Ruijter and Doff worked together with different universities such as Nyenrode and the University of Amsterdam. We supported the development of the Enterprise Risk Management (ERM) program of the University of Amsterdam. Furthermore, De Ruijter and Doff collaborated on several projects; the combination of De Ruijter's expertise in scenario-based analysis and Doff's expertise in risk management served as a solid base for a narrow cooperation. We also supported Rabobank, one of the biggest Dutch banks, in 2002 to develop an exploration of the environment and the prospects for short- and long-term interest development till 2010. The development of scenarios for Rabobank prepared the organisation for the financial crisis of 2008. In addition to that, De Ruijter's experience with scenario planning and Doff's knowledge on risk management was merged in the support of the association of insurers. The introduction of Solvency II in 2016 obliged insurers to test their own solvability with an Own Risk and Solvency Assessment (ORSA), in which scenarios and stresstests are used to analyze and minimalize major risks.
The publication of “Behavioural Risk Management” is partly attributed to years of narrow cooperation in which De Ruijter and Doff have gained from each other’s expertise. As a practitioner of the latest academic insights developed by dr. René Doff, Paul is quoted on the back cover: “Since the oil crisis in the seventies, the credit crisis a decade ago and the COVID-19 pandemic, we know that scenarios can help to identify and manage low probability / high impact risk. In this book Dr. René Doff combines state-of-the-art insights in the disciplines of behavioral economics and scenarios to drastically improve risk-management practices. A well-researched, and at the same time, very practical book for academics and practitioners alike.”
In June 2021 the book was officially launched at the University of Amsterdam.
If you are you interested in scenario-based analysis for your own company or organization, don’t hesitate to get in touch .