Have you ever played Jenga? You know that feeling when you pull out one block, and the whole tower starts to wobble? You’re holding your breath, hoping nothing else shifts. Now, imagine three people are pulling blocks at the same time, while someone else is shaking the table.
That’s pretty much what the global risk environment feels like right now. And there’s a new word for it that you’re going to be hearing a lot more: polycrisis.
It’s a term that the president of RIMS, the risk and insurance management society, recently used to describe what the insurance market is going to look like by 2026. And honestly, it’s the perfect word. It’s not just about facing multiple crises at once; it’s about how they’re all tangled together, feeding off each other and creating a mess that’s much bigger than the sum of its parts.
If you’re a risk manager or a business owner, this isn’t just some fancy industry jargon. This is a fundamental shift in how we have to think about protecting our businesses. The old ways just aren’t going to cut it anymore.
So, What Exactly Makes This a "Polycrisis"?
Let’s break it down. For years, we’ve gotten pretty good at managing risks in their own little boxes. You’ve got your cyber insurance for data breaches, your property insurance for fires or floods, and your liability insurance in case someone gets hurt. Each risk had its own lane.
But the world isn’t that neat and tidy anymore. A single event can now trigger a cascade of losses across totally different areas of your business.
Think about it like this:
- A geopolitical conflict breaks out (a political risk).
- This immediately triggers a massive cyberattack on critical infrastructure (a cyber risk).
- That cyberattack disrupts a key shipping port, snarling your supply chain (a business interruption risk).
- Now you can’t get the parts you need, leading to financial losses and unhappy customers (a reputational risk).
See what happened there? One event didn’t just cause one problem. It set off a chain reaction, and a traditional insurance program might struggle to respond because the losses are so interconnected. The property policy doesn’t talk to the cyber policy, and neither of them is really designed for a massive supply chain failure caused by a war halfway across the world.
This is the heart of the polycrisis. It’s the unpredictable and tangled nature of modern risks. Climate change, economic instability, political unrest, technological disruption—they’re no longer separate storms. They’re merging into one giant, unpredictable superstorm.
Why Our Old Risk Management Playbook is Failing
For a long time, the name of the game in risk management was “risk transfer.” Basically, you identify a risk, you figure out how much it could cost you, and then you buy an insurance policy to hand that financial risk over to an insurer. It was a clean, transactional process.
But how do you buy a single policy for a polycrisis? You can’t.
The siloed approach—where the IT department worries about cyber, the facilities manager worries about property, and the legal team worries about liability—is becoming dangerously outdated. When these risks are all interconnected, the teams managing them need to be, too.
If your cyber team isn't talking to your supply chain team, you could be completely blind to how a ransomware attack could halt your entire operation for weeks. If your finance team isn't modeling the impact of sudden inflation spikes on your business interruption values, you could find yourself massively underinsured.
The problem is that the insurance products we rely on were largely built for a simpler, less connected world. They were designed to respond to a specific, named peril. But a polycrisis doesn’t have one name. It’s a messy, sprawling event that blurs the lines between different types of coverage.
It's Time to Shift from Buying Insurance to Managing Risk
So, what’s the answer? If we can’t just buy our way out of this problem, what do we do?
According to the folks at RIMS, and I have to say I completely agree, we need to fundamentally change our mindset. We have to move from being passive insurance buyers to becoming proactive risk managers.
This means a few key things:
1. Break Down the Internal Silos
First things first, you’ve got to get your people talking. Risk management can't be the job of one person or one department anymore. It has to be a team sport. Your C-suite, IT, operations, finance, and legal teams all need to be at the same table, sharing information and planning for these complex, multi-faceted scenarios.
2. Get Serious About Scenario Planning
Instead of just asking, "What happens if we have a fire?" you need to be asking tougher questions. "What happens if a hurricane hits our main supplier during a major cyberattack on the banking system?" These kinds of multi-layered scenarios might seem unlikely, but in a polycrisis world, they’re exactly what you need to prepare for.
3. Build a True Partnership with Your Broker and Insurer
Your relationship with your broker can't just be a phone call once a year to renew your policies. They need to be a strategic partner who deeply understands your business and can help you navigate this new reality. They can help you identify the gaps between your coverages and find more creative solutions, like parametric insurance or other alternative risk transfer methods that pay out based on a trigger event, not a complicated loss adjustment process.
The truth is, we’re all going to have to get more comfortable with a bit of uncertainty. The goal is no longer to eliminate all risk—that’s impossible. The goal is to build resilience. It’s about creating an organization that is flexible, aware, and prepared enough to bend without breaking when the interconnected crises hit.
Looking ahead to 2026, the companies that will succeed aren’t the ones with the thickest insurance binders. They’ll be the ones who understood the connections, who planned for the cascade, and who built a culture of risk awareness from the ground up. It’s a big challenge, for sure, but it’s also an opportunity to build stronger, smarter, and more durable businesses.
