---
title: "The Effect-Based Resilience Approach"
source_url: https://abgalis.com/papers/effect-based-resilience-approach
canonical: https://abgalis.com/papers/effect-based-resilience-approach
description: "Abgalis Paper 05 — six universal effect categories that transform how insurers prepare for the unknowable. Effect-based resilience for ORSA + SS5/25."
publisher: Abgalis Limited
author: Abgalis Research
date_published: 2026-05-08
date_modified: 2026-05-08
keywords: ["effect-based resilience", "operational resilience", "ORSA scenarios", "unknown unknowns", "severe but plausible"]
retrieved: 2026-08-01
content_signal: search=yes, ai-input=yes, ai-train=no
citation: "Abgalis Research, 'The Effect-Based Resilience Approach', Abgalis Limited, https://abgalis.com/papers/effect-based-resilience-approach"
license_note: >-
  May be quoted and cited in AI-generated answers with attribution to the author named
  above and a link to source_url. Not licensed for model training or fine-tuning
  (ai-train=no; Art. 4 reservation, EU Directive 2019/790).
---
ABGALIS Position Brief · Paper 05 · 2026

# The Effect-Based *Resilience Approach*

Moving from cause-based to effect-based resilience. Six universal effect categories that transform how insurers prepare for the unknowable.

Resilience · ORSA · Scenarios ·

## The cause register is incomplete by construction

Every firm's operational-resilience cause register has the same structural problem. It contains every cause anyone has thought to enumerate. It does not contain the causes no one has thought to enumerate. The gap is structural — the number of plausible causes of disruption to a modern insurer's operations is unbounded; the register grows by post-event addition, which means it reliably tells the firm how to defend against the last battle.

The effect register, by contrast, is bounded. The number of effects any disruption can produce is small, because all causes act on the firm through a small set of mechanisms.

## Six universal effect categories

1. **Physical-asset disruption** — buildings, equipment, datacentre kit unavailable. Cause irrelevant.

2. **Workforce impairment** — people unavailable, unable to attend, or unable to perform at standard.

3. **Data and decision integrity** — information on which decisions rest becomes unreliable.

4. **Capital-account drain** — solvency, liquidity or capital position deteriorates beyond planned tolerances.

5. **Regulatory-pressure cascade** — supervisory action limits permitted activity beyond what capital alone constrains.

6. **Reputational and trust cascade** — commercial position narrows independently of capital.

### Why six

Five would miss something — typically the regulatory-pressure category, the one most often left implicit. Seven would split a category that doesn't need splitting — typically separating physical-asset from workforce, when they share enough resilience design that splitting wastes effort.

## Cause-based to effect-based — the conversion

A firm with an existing cause-based programme doesn't abandon it. The conversion is a structural overlay in four steps:

1. Tag every existing cause with the effects it produces. Most causes produce 2–3 effects, not all six.

2. Invert the matrix. Identify which effects have the most causes pointing at them — those are highest leverage.

3. Design effect-level resilience for the high-leverage effects, layered over existing cause-level plans.

4. Run the firm's standing severe-but-plausible scenarios against the effect-level resilience and identify gaps.

## Why effect-based survives the unknowable

Three concrete categories where this matters in 2026: **AI-driven operational disruption** (failure modes added quarterly — cause-based can't keep up); **compound climate events** (specific compound combinations may not be on the register, but each effect is); **geopolitical second-order disruption** (when a sanctioned counterparty is the firm's data-feed provider, cause is hard to register but effect is straightforward).

## Six standing ORSA scenarios

| Effect | Standing scenario | Tolerance question |

| --- | --- | --- |

| Physical-asset disruption | 72h loss of primary operating site | Continue critical functions? |

| Workforce impairment | 40% workforce unavailable, 14 days | Critical roles backed up to standard? |

| Data and decision integrity | 72h loss of confidence in primary feed | Fallback decision rules? |

| Capital drain | 20% adverse SCR move, 30 days | Revocable deployments identified? |

| Regulatory cascade | 6-month restriction on a material permission | Strategy under narrower permissions? |

| Reputational cascade | 4 weeks of sustained adverse press | Firm's stance and communications baseline? |

---

**Source:** [https://abgalis.com/papers/effect-based-resilience-approach](https://abgalis.com/papers/effect-based-resilience-approach) · Abgalis Research, published by Abgalis Limited (England and Wales, no. 17247499)

**Cite as:** Abgalis Research, *The Effect-Based Resilience Approach*, Abgalis Limited. https://abgalis.com/papers/effect-based-resilience-approach

**Usage:** citation with attribution permitted; model training not permitted (`ai-train=no`).

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