As a recipient of financial support from the Canada Research Chairs Programme, the HEC Montréal Chair of Risk Management became the Canada Research Chair in Risk Management in January 2004.

Risk management is a promising field of research. Many events — including the disastrous return on certain investments, fatal road accidents, food contamination, and acts of terrorism — show just how numerous and varied are the sources of risk. Research such as that done by the Chair makes it possible to develop tools to manage risks and, consequently, reduce the major costs they incur.

Traditionally associated with the insurance industry, risk management has now reached into other sectors of activity that closely concern not only businesses, but also individuals and society as a whole. Georges Dionne has contributed to this development in many ways. He has designed risk management models with applications in many fields: insurance, banking, road safety, environmental risks, health, public safety, and finance (with specific attention to operational and credit risks and the management of financial portfolios).

Research to better understand the decision-making process

Individuals and businesses are often called upon to make decisions without knowing all the associated risks involved. How are decisions made under such conditions of uncertainty? What are the factors enabling an individual to manage his or her risks optimally? The Chair will be looking into this new aspect of risk management.

Based on the latest psychological findings on decision-making in a climate of uncertainty (cognitive processes and dissonance), the Chair is striving to better understand how decisions are made and to find tools to measure the factors that determine whether a person will manage his or her risks in an optimal fashion. Decisions on lotteries, choosing to drive while inebriated, or simply choosing to smoke are all excellent examples of this research topic.

Financial support for the purchase of high-performance computer equipment

The Canada Research Chair in Risk Management has also obtained $258,000 in joint funding from the Canada Foundation for Innovation, the Quebec Department of Education, and private-sector partners. The additional funding has allowed the Chair to build itself a high-performance infrastructure: Equipment needed to handle huge databases and rapid calculations has been purchased. This powerful computer hardware opens new access to fields of research, such as bank insurance or insurance pricing for vehicle fleets, which require the processing of millions of observation spread out over time.

Description of the research (pdf version)