My love-hate relationship with bow-tie analysis

Bow-Tie Analysis is often presented as a panacea for the analysis of risk. On the one hand, they are intuitive, provide a useful structure for the discussion of risk, control and mitigation and they provide a natural bridge between qualitative and quantitative assessment methodologies. At the same time, however, they are illogical, prohibitively restrictive in what they can model, and potentially value-eroding.

In this talk, I will present bow-tie analysis and the natural way in which it supports the quantitative analysis of event-based loss risks. I will discuss their categorical shortcomings and the modelling challenges they represent; and I will suggest an interpretation that resolves many of these challenges, while maintaining much of their apparent intuitive appeal.


Presentation slides

About The Speakers

Graeme Keith

Graeme Keith

Professional Services Lead, Risk Quantification, Archer IRM