Year In Risk 2025 with Morgan O'Rourke and Hilary Tuttle

RIMScast

chevron_right

00:00

Wildfires: 2025's costly insured peril

Morgan and Hilary review California and Canadian wildfires, severity drivers, and insured-loss impacts.

Play episode from 11:24

chevron_right

Transcript

chevron_right

Transcript

Episode notes

Welcome to RIMScast. Your host is Justin Smulison, Business Content Manager at RIMS, the Risk and Insurance Management Society.

In this last episode of 2025, Justin interviews Morgan O'Rourke and Hilary Tuttle of RIMS Risk Management magazine on the most impactful risks of 2025 and what's expected in 2026. They discuss the difficulty of reporting on the rapid pace of risk change. Morgan and Hilary discuss the most impactful natural events of 2025: wildfires in California and Canada, Hurricane Melissa, and flooding. They discuss the economic risks posed by the unusual tariff changes in 2025 and how supply chains and inflation are affected. These risks are covered in the Q4 edition of RIMS Risk Management magazine online now.

Morgan and Hilary will return for the first episode of 2026, launching on January 5th.

Key Takeaways:

[:01] About RIMS and RIMScast.

[:17] About this episode of RIMScast. This is our final episode of 2025, and who better to spend it with than Morgan O'Rourke and Hilary Tuttle of RIMS Risk Management magazine?

[:44] We will discuss some of the top risk management stories of 2025 and what they might mean for 2026. They will rejoin us for the first episode of 2026! But first…

[:55] RIMS-CRMP and Some Prep Courses. The next virtual prep course will be held on January 14th and 15th, 2026. These are virtual courses. Links to these courses can be found through the Certification page of RIMS.org and through this episode's show notes.

[1:12] RIMS Virtual Workshops are coming up. On January 21st and 22nd, Chris Hansen returns to deliver the course, "Managing Worker Compensation, Employer's Liability and Employment Practices in the US".

[1:26] The full schedule of virtual workshops can be found on the RIMS.org/education and RIMS.org/education/online-learning pages. A link is also in this episode's notes.

[1:38] RIMS members always enjoy deep discounts on the virtual workshops.

[1:48] The RIMS-CRO Certificate Program in Advanced Enterprise Risk Management is hosted by the famous James Lam. This is a live virtual program that helps elevate your expertise and career in ERM.

[2:01] You can enroll now for the next cohort, which will be held over 12 weeks from January through March of 2026. Registration closes on January 5th. Or Spring ahead and register for the cohort that will be held from April through June, 2026. Registration closes on April 6th.

[2:20] Links to registration and enrollment are in this episode's show notes.

[2:27] On with the show! The annual Year in Risk Review edition of RIMS Risk Management magazine is now available. Visit RMmagazine.com for more information.

[2:39] I wanted to dive deeper into some of the pages and the stories that made major headlines in risk management this year. Morgan and Hilary are rejoining us as part of our annual tradition.

[2:54] We're not just looking back; we're also going to talk about how these events should be some warning signs and provide some extra insight for risk managers around the world.

[3:05] Interview! This is our final episode of the year, and we're going out with a bang with two of my favorite people!

[3:12] Morgan O'Rourke and Hilary Tuttle, welcome back to RIMScast!

[3:23] Justin saw Morgan and Hilary, just a month ago in Seattle, at the ERM Conference. Morgan says it was raining the whole time, but it was a good conference. It was well-attended, and everybody enjoyed themselves, and the attendees got a lot out of it. It was a great event!

[3:51] Hilary also thought it was great! The turnout was fantastic! There was some great feedback on a lot of the sessions. There were some packed rooms! People seemed pleased with the programming. Hilary didn't see the sun until she left, but she enjoyed the city!

[5:12] Morgan and Hilary's goal for attending the ERM Conference is to gather good ideas for articles. They look for presenters who might be good content contributors in other formats. They look to get a sense of what is new and what is emerging.

[5:24] Morgan and Hilary talk to members about what they're seeing in practice and what's concerning to them. Morgan says if there's a packed room for a session, it's clearly a topic that's resonating, which bumps it to the top of the list of things to pursue, since there's interest in it.

[6:17] Justin notes that Morgan's always there in the sessions with pen and paper. He's old school!

[7:36] Morgan says the hardest part of reporting on risk is the breadth of the risks they cover. Everything has a lot more nuance and a lot more effect. This incident happened, which had 57 knock-on effects.

[7:47] Morgan explains why distilling that down to something that makes sense in article form is a huge challenge and compares writing about risk to the experience risk managers have with everything they deal with.

[8:10] Morgan says that, at the end of the year, spotlighting the year in risk coverage is a challenge. How do you get the entire economic, geopolitical situation down to 200 words?

[8:37] Hilary says the velocity of change is a challenge when covering risk. Unlike in everyday news coverage, they have to add an amount of value or takeaways for a reader who is looking to do something about risk. Developing that value, at the speed of risk, is particularly challenging.

[9:15] Hilary continues. Crises are compounded now. You can't ignore a lot of those factors that make a crisis a bad issue. Hilary cites hurricanes, rapid intensification, which is a knock-on effect of climate change, lax building codes, and people building more in certain regions.

[9:38] Hilary says you have to add so many layers to explain why this crisis is happening now. It becomes a lot more challenging to figure out how it impacts insurance. You have to take into account different exclusions or the way the policies are created. There are a lot of moving parts.

[10:04] Morgan says, It's not just your picture. It's the picture of your suppliers and your customers, who might be across the country or around the world. All of their risks become your risks or, at least, will impact your business.

[10:33] Justin compliments the digital layout of RIMS Risk Manager magazine. He speaks of how Morgan and Hilary go to RIMS events looking for inspiration for content and content contributors.

[11:05] Morgan says, We're only as good as the information we've learned through the people we've met, or what we've read. We're not practicing risk managers. Hearing from experts who deal with it every day is the strongest way to get good content that resonates with our readers.

[12:17] Morgan says wildfires were probably the most costly insured loss of 2025. Hilary says that earthquakes were the most costly in terms of the loss of life. The LA fire was the largest single economic loss. There are lots of expensive homes in Southern California.

[13:26] Canada has had wildfires raging almost non-stop for two or three years. Wildfires are no longer secondary perils. They're a prime source of loss. Severe convective storms, in the aggregate, probably caused more damage than wildfires this year.

[14:04] Hilary says severe convective storms have been in the top 10 for seven out of the last 10 years. Morgan says this was one of the top convective storm years. In natural disasters, you're not looking just at hurricanes and earthquakes, but also fires, floods, and more.

[14:32] Hilary talks about secondary factors, like tremendous wind events in California, increasing the rate at which fires spread, making containment difficult. Things were moving fast. A lot of buildings were burning. It took three weeks to put out two of the largest fires.

[15:05] Canada faced different challenges. All but two provinces had record, above-average fire seasons. Some fires impacted remote areas where getting people out is logistically extremely difficult. Seventy-something First Nations communities had to be evacuated.

[15:35] If you're dealing with areas that are largely only accessible by air, getting communities of people out for long periods is logistically very challenging, with a devastating human impact. They're very different fires.

[15:52] Hilary says it was quite a year. Morgan ties it back to the impact of climate change. It starts with drought, and it's exacerbated by winds. Then you've got these weird things that pop up where Mother Nature says, Hey, I've got a weird twist for you!

[16:13] Quick Break! RISKWORLD 2026 will be held from May 3rd through the 6th in Philadelphia, Pennsylvania. RISKWORLD attracts more than 10,000 risk professionals from across the globe. It's time to Connect, Cultivate, and Collaborate with them. Booth sales are open now!

[16:35] General registration and speaker registration are also open right now! Marketplace and Hospitality badges will be available starting on March 3rd. Links are in this episode's show notes.

[16:50] Let's Return to Our Interview with Morgan O'Rourke and Hilary Tuttle!

[17:11] Some of the fires Canada experienced this year were zombie fires, also called holdover fires, or overwintering fires. They can live in the soil under the snow until it gets warm, the snow melts, and they reignite. Some of the fires of 2025 were started in 2023.

[16:23] Hilary believes those holdover fires were in Saskatchewan, Manitoba, the Northwest Territories, and up North. Holdover fires are most common in the Arctic Circle.

[18:43] Morgan and Hilary believe that's a good example of things that will happen more frequently with climate change, affecting a larger number of people than before.

[19:15] Morgan says convective storms are tornadoes and thunderstorms. Hilary adds that it has to do with the pressure front that leads to forming them. Outbreaks of many tornadoes in a couple of days wreak havoc in the U.S. Midwest.

[20:06] Morgan says the highest intensity of a tornado is EF5. There was an EF5 tornado in North Dakota for the first time in 10 years. It touched down in a place where there were not a lot of people.

[20:35] Hilary says we're seeing increasingly severe convective storms and inland flooding losses. Severe storms are flooding areas that weren't thought of as being at risk of flooding.

[20:50] The more we build into these plains with high-value properties, the more damaging convective storms are getting. The storms are also getting worse. We're also seeing increasingly damaging hail. That's a severe convective storm issue, as well.

[21:27] Morgan says climate change makes things more intense and widespread. Morgan says his favorite climate change after-effect was the attack of the jellyfish this year.

[21:57] There were multiple instances of French nuclear power plants being taken offline by giant swarms of jellyfish clogging the coolant intake lines. Europe had a super-hot summer. Water temperatures rose, which increased jellyfish activity and presence.

[22:26] There were so many jellyfish, they ended up in places they shouldn't be. France generates 70% of its electricity through nuclear power. If nuclear power plants are taken offline, it's not just a minor annoyance.

[22:51] If you're a company during a blackout, you don't care that it was jellyfish. You're still not in business for the time that you don't have power. Suddenly, this climate change effect is now a part of a disaster preparedness plan because of climate change. You have to plan for jellyfish.

[24:43] Hurricane Melissa was another storm with widespread flooding and enormous insured losses. Morgan notes that 2025 was a relatively low-activity season from the standpoint of how many hurricanes made landfall.

[25:18] Melissa was the most damaging and probably accounted for 90% of economic losses and loss of life. It did billions of dollars' worth of damage.

[25:33] There were three Category 5 Hurricanes this year; four is the record, but they mostly went out into the ocean; they didn't do anything. That doesn't mean it's always going to happen. If one storm hits the right place, you're in trouble.

[26:07] It was an active storm season for Jamaica. It only takes one storm in your area to be an active season for you.

[26:25] Hilary says Melissa is a textbook case of some of the perils of rapid intensification. It got much worse very quickly. The fact that we've seen such a proportion of Category 5 storms is a pattern that is concerning.

[26:57] They discussed rapid intensification in the hurricane outlook for the season. Hurricane Erin also occurred this year. It intensified quickly, but it didn't cause a lot of damage. Your lead time is less when a storm intensifies quickly.

[27:32] Morgan says it's important to get things in order before storms hit because you may not have the time to do it when it's mid-season. You don't know where or when a storm will hit.

[27:50] Wikipedia calls Melissa the costliest storm in Jamaican history, at $10 billion in damage, 102 fatalities, 141 injuries, and 27 missing.

[28:38] A Final Break! The Spencer Educational Foundation's goal to help build a talent pipeline of risk management and insurance professionals is achieved, in part, by its collaboration with risk management and insurance educators across the U.S. and Canada.

[28:57] Spencer awards undergraduate, graduate, Ph.D., and Pre-Instructor of Practice Scholarships to students enrolled at an accredited college or university in the U.S. and Canada, and physically studying in either location. No remote coursework eligibility from other locations.

[29:14] Including part-time, graduate scholarships to risk management and insurance professionals continuing their education.

[29:20] Since 1980, Spencer has invested more than $11.1 million in the scholarship program with awards to over 1,700 students. More than 85% of Spencer's scholarship recipients remain in the industry to this day.

[29:35] They've got undergraduate scholarships, full-time Master's scholarships, part-time Master's scholarships, pre-dissertation Ph.D. candidates, doctoral candidates, and pre-instructor of practice scholarships all open now. The application deadline is January 31st, 2026.

[29:57] Visit SpencerEd.org/scholarships. You'll find the different application buttons. See the link in this episode's show notes for more information, giving you some extra homework to do over the holiday break, if you are taking a holiday break!

[30:14] Let's Return to the Conclusion of Our Interview with Morgan O'Rourke and Hilary Tuttle!

[30:46] Justin mentions that tariffs in 2025 affect 90% of U.S. imports. That's a supply chain management issue and an ERM issue. Tariffs themselves are an issue.

[31:16] What Morgan connects most to tariffs is the uncertainty they create, especially in the way they've been implemented this year. Tariffs are promised, then the terms are changed, creating uncertainty. What level of costs will businesses absorb or pass on to customers?

[31:50] Morgan says those things make the business landscape unstable. Tariffs in April would be better than 57 different announcements that change the picture every other week and tend to tank the stock market.

[32:20] Morgan says Goldman Sachs estimated in September that 55% of the incurred costs have been passed to consumers, depending on the business. Once it impacts your customers, you've got less revenue coming in. It's an unstable environment.

[32:47] Hilary contrasts this year's tariffs with past tariffs. Usually, it's a "set it and forget it" situation. Hilary calls this year's tariffs erratic and confusing. The scale and the frequency of change are unprecedented.

[33:31] Morgan says you can feel it when you go to the store. That's not helping from a personal standpoint or a business standpoint. Justin speaks of shrinkflation.

[33:47] Tariffs are going to affect inflation. Nobody wants that.

[34:22] Hilary speaks of alternate supply chains that are in more friendly tariff environments. Some of the items in your products are going to be different. Some of your processes will be different. You don't know if you're also going to be getting inferior products.

[34:52] Morgan says it's not as simple as saying just get a new supplier. That's an operational shift from procurement, on. Hilary says, hopefully, you won't have to do product safety testing or environmental impact studies, or reporting around your supply chain.

[35:09] Morgan notes that some raw materials may only be available in five countries, like a rare earth mineral.

[35:32] Justin asks if this is explored in depth in the Q4 edition of RIMS Risk Management magazine. Hilary says we are not talking about rare earth minerals in that issue. Morgan is working on figuring out how we can cover that, perhaps, in 2026.

[35:53] Morgan is fascinated by this topic. There are limited deposits of things. The broader point is that if you're affected by tariffs and you're trying to change suppliers or sources, you may not have all the options.

[36:12] Hilary says it is a situation where the risk is very much there, but the management or mitigation of it is not necessarily something you can do much about. Only so many places make cobalt. Morgan adds, There are only so many mines out there.

[36:31] Justin says, The Q4 edition of RIMS Risk Management magazine is out now. This is the last episode of 2025. We're going to have you back to discuss a little bit more in the first episode of 2026.

[37:01] Morgan's parting words: "I'm just glad you're listening. I'm glad you're listening. I'm glad you're reading. I'm glad you're here. I feel like it's a privilege to keep writing for you, talking to you, so hopefully, we continue to do that in the new year. Everybody, be safe and happy."

[37:14] Hilary's parting words: "Thanks for making it through another year!"

[37:18] So, we're going to have you back in January, and we'll pick up there, probably with some cyber and some Data Privacy Day kick-off, January 5th, 2026.

[37:35] Special thanks again to Morgan O'Rourke and Hilary Tuttle of RIMS Risk Management magazine and the RIMS Publications Department for joining us on RIMScast. They will rejoin us for the first episode of 2026. That will launch on January 5th.

[37:52] Mark your calendar and subscribe to RIMScast through your podcasting app of choice! Visit RMmagazine.com to check out The Year in Risk edition of Risk Management magazine. That's the Q4 edition. This is reporting from the best in the profession.

[38:12] You can't get any better than RIMS Risk Management magazine.

[38:17] Plug Time! You can sponsor a RIMScast episode for this, our weekly show, or a dedicated episode. Links to sponsored episodes are in the show notes.

[38:44] RIMScast has a global audience of risk and insurance professionals, legal professionals, students, business leaders, C-Suite executives, and more. Let's collaborate and help you reach them! Contact pd@rims.org for more information.

[39:01] Become a RIMS member and get access to the tools, thought leadership, and network you need to succeed. Visit RIMS.org/membership or email membershipdept@RIMS.org for more information.

[39:18] Risk Knowledge is the RIMS searchable content library that provides relevant information for today's risk professionals. Materials include RIMS executive reports, survey findings, contributed articles, industry research, benchmarking data, and more.

[39:34] For the best reporting on the profession of risk management, read Risk Management Magazine at RMMagazine.com. It is written and published by the best minds in risk management.

[39:47] Justin Smulison is the Business Content Manager at RIMS. Please remember to subscribe to RIMScast on your favorite podcasting app. You can email us at Content@RIMS.org.

[39:59] Practice good risk management, stay safe, and thank you again for your continuous support!

Links:

RIMS Risk Management Magazine: Year In Risk Edition | Feature Article

Facilitating Risk-Based Decision Making | Virtual Workshop | March 4‒5, 2026

RIMS-CRO Certificate Program In Advanced Enterprise Risk Management | Jan‒March 2026 Cohort | Led by James Lam

RISKWORLD 2026 Registration — Open for exhibitors, members and non-members!

Reserve your booth at RISKWORLD 2026!

The Strategic and Enterprise Risk Center

RIMS Diversity Equity Inclusion Council

RIMS Risk Management magazine | Contribute

RIMS Now

Spencer Educational Foundation Scholarships | Submission Deadline Jan. 31, 2026