Good morning. Thank you to Insurance ERM for inviting me to speak at your conference. When I told a colleague I had been asked to give a talk on responses to risk, he told me: "the fox knows many things; the hedgehog knows one important thing."

I was curious to learn more: this idea came from a fragment of text by an Ancient Greek poet Archilochus of Paros; it inspired Isaiah Berlin's 1953 essay on Tolstoy's view of history; and has been used in Jim Collins's book From Good to Great. What it boils down to is a way of thinking, one that guides how you prepare for and respond to risk: the fox looking at every eventuality; the hedgehog's one big idea being to curl into a ball and wait for the peril to pass. I'm left with the image of the fox hopping about and getting ever more frustrated as it schemes how to get at the hedgehog.

Today I will take a look at some of the tactical steps we have taken around the financial markets and macro-economic impact of Covid-19 on insurers. And go on to more strategic responses to this and other structural changes, focussing on developments in stress testing and scenario analysis.

(Full text available at BIS，20 November 2020)