Back in 2007, statistician Nassim Nicholas Taleb described a “Black Swan” as an occurrence that “is an outlier,” meaning it deviates from accepted wisdom. Accordingly, black swans are unanticipated, and uncommon, and can result from geopolitical, economic, or other unanticipated occurrences.
Because of major advances in computing, we can now anticipate, and, with applied risk management, help contain what was described as Black Swan events. So, in effect, with predictive analytical capabilities enabled by artificial intelligence, most Black Swans have now morphed into what is now termed Grey Swan events.
An industry leader in the insurance sector, Aon, defines Black Swan events as unexpected, unanticipated shocks. They depict unexpected but predicted surprises that are known as “Grey Swan events.” Similar to Black Swans, they can have a profound effect.
