Includes index.

pt. 1. An introduction to the crisis
Healthy skepticism for risk management
Risk management : a very short introduction to where we've been and where (we think) we are
How do we know what works?
pt. 2. Why it's broken
The "four horsemen" of risk management : some (mostly) sincere attempts to prevent an apocalypse
An ivory tower of Babel : fixing the confusion about risk
The limits of expert knowledge : why we don't know what we think we know about uncertainty
Worse than useless : the most popular risk assessment method and why it doesn't work
Black swans, red herrings, and invisible dragons : overcoming conceptual obstacles to improved risk management
Where even the quants go wrong : common and fundamental errors in quantitative models
pt. 3. How to fix it
The language of uncertain systems : the first step toward improved risk management
The outward-looking modeler : adding empirical science to risk
The risk community : intra- and extraorganizational issues of risk management

"The Failure of Risk Management is about a serious problem in the business of risk analysis and how to fix it. Basic analysis methods are unused, or misapplied, in many major corporate and government decisions. This book shows how some of the most popular "risk analysis" methods are no better than astrology -they are not based on anything an actuary or statistician would recognize as sound, quantitative analysis. Businesses, governments, and the public have completely unrealistic perceptions of risk, currently. This book addresses proper risk methodology, to educate decision makers across industries. This new edition will include new examples citing recent events (e.g. hurricanes and data breaches), new statistical methods, and updated data"--